retailers. i think target tomorrow, walmart this week. a big interview at 6:00 p.m., david faber will be sitting down with elon musk must-see television. >> i just -- anything -- >> that's what i mean. it's live. >> the richest guy in the world. he can basically say anything. what are you going to do sue me tune in tomorrow to "squawk on the street." good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim kraerm at the new york stock exchange david faber is in austin, tesla's annual shareholder day he'll be live tonight at 6:00 eastern time you cannot miss that meantime, a packed morning retail sales returns to growth debt ceiling, home depot cuts guidance our roadmap begins with home depot shares shrinking after

posting the worst revenue miss in about 20 years. plus, quote, no barrier to higher rates that's the message from barkin today. and ev competition david is in texas to talk to elon musk, and ford scaling back some china investments let's get to david in texas with more on tonight, david we were just talking about the range of topics that you'll be able to cover, whether it's cars, space, media, macro. it's going to be incredible. >> we certainly hope so. obviously we'll be coming out of the tesla shareholder meeting. we'll be curious to see what questions mr. musk takes during that meeting, whether there's anything worthy of followup. certainly that will be top of mind, especially given the interest of our viewers in terms of tesla and its importance. that said, there's no shortage of other topics as always to discuss with mr. musk. as often as he does interviews, it seems like almost every day brings new things to discuss today reports about a memo he

sent in terms of let mereview all hiring plans and things of that nature. so no shortage, whether it's tesla, whether it's the recent hire of linda yaccarino, whether it's new developments in terms of ai, and whether it's spacex or star link, you can go on and on quite a few hours now until sitting down with elon musk. >> david, is your focus because you're there the possibility of meeting with auto and ev, or there's so much on your plate that you can start anywhere? >> i kind of feel like, jim, from an importance/news perspective, tesla will be top of mind. you don't ever want to give it away but if elon is listening, doubt he is, that's probably where

we'll start. that said, you've watched many things he's done i certainly have as well you never know where you're going to go because he's certainly going to move the topics around as well. we'll be prepared to go wherever he wants, including to mars. >> david, i don't know whether we've had a transcendent figure in business in our life times other than this gentleman. transcendent meaning as edison was, transcendent as, say, j.p. morgan was that's why i think it's such a great thing to have you down there. no one has defined it there in my lifetime. this man has. >> we say it all the time. he's the most consequential businessman on the planet, and it's not in the realm of creating flu apps or anything like that. it's rocket ships. it's cars. obviously the leader in ev

your point is an important one, jim. he's coming from having met with emmanuel macron yesterday in france because they're seeking perhaps to get tesla to become more involved in their economy that just gives you a sense, doesn't it, in terms of his importance and then on twitter, controlling that platform as he does, and the elections around the world and the role that twitter can play so, yeah, some people might want to make the comparison, for example, with steve jobs in some way, but he's a unique character. there's no doubt about it. >> meantime, the ai element i think is going to be interesting. you mentioned the sam altman hearing. some of these 13fs where it appears a lot of the big players, his stake in nvidia, people are playing this big time. >> look, i think they have to. when you go over -- when you speak with the executives at these major companies, the first thing they tell you is, you know, you haven't thought about what we're doing in ai

i think that you come back over and over again to nvidia -- if jensen huang is seen with someone, it's kind of an endorsement that they have figured out how to do it we keep forgetting, make it smaller, make it smaller, make it smaller and a little more powerful along comes this man who says that is conventional weaponry. i have atomic weaponry it goes much faster and is much more powerful. all the things you've been doing before this simply don't work. the fact that jensen was with sam walt man in 2016 and 2017 saying this is remarkable. the fact he was willing to show it to people and it meant nothing to chatgpt is extraordinary. anyone that would listen to jensen knew he had something special. people weren't listening

some is he's inherently non-pro non-promotional. we couldn't see what he was saying, our brains aren't big enough. >> as for altman, david, it takes you back to musk altman is expected to tell regulators, at least the senate, that regulation is essential curious to see if his view dovetails with musk's. >> musk is amongst a number of leaders who called for a pause in the development from at least right here in terms of chatgpt 4. he is potentially launching his own service of some kind, xai. he was one of the most, if not the single most important investors in open ai yes, there's no doubt this is an important area to discuss with him, not the mention, of course, he's shared concerns that i have certainly shared as well in terms of what does this mean for humanity including will it

actually be the end of humanity. so, yeah, just a few things to discuss. >> david, on that issue, jensen will tell you there -- everyone is working on guardrails i think in darker moments he might say it can't be stopped. it's just the way it is. it's something that's going to go where we don't know we want it to go somewhere productive david, i think if you ask the man you're about to speak to at 6:00, whether something nefarious could come from this, i think he'll say it's already happening. >> without a doubt in previous interviews he's given some sense as to his view of the dark path it could go down that's why i think, in fact, why he's concerned and asking for that pause yeah, jim, i think that's true did you listen to nardella this morning? >> of course

>> he seems to think they can twin the guardrails and development in an effective way. i'm not sure if anyone agrees. >> there is a bit of a business angle. if you want to be ahead in the game, you have to bring in microsoft. i don't think you sit there -- by the way, alphabet said the same thing i don't think you sit there and say, we're not the guys because we haven't been able to think big. david, thinking big often -- i was watching people have to go back to the things that andy jassy said when hep wrote his letter they directly talked about the idea of facial recognition in government and how important it is facial recognition in government, you know that's the prc. we don't want facial recognition and you saying things to me that aren't really you, something you may not really mean. we've changed everything we feel about ourselves and the government owns us you can easily say that's the way amazon could in the wrong

hands be able to do already. >> well, we've looked at the development of ai in terms of the surveillance society in china, for example, jim and seen the tools they have available to them and make sure they're aware of virtually everything that's said and done. >> carl, i don't know. i think when we hear what the man who probably could do more with it than anyone in the world has to say about it, elon musk, i think all of us will be shaking if he goes to where we hadn't even thought we could go. >> yeah. finally, as for china, david, some of the macro overnight was not good on industrial production youth unemployment, backup of 20%. you have farley of ford telling the ft there's no guarantee western automakers are going to wait in china. there's a good chance it will be the byds and teslas that will succeed there at least

>> yeah. your man farley, jim, a jocular relationship, musk and farley. >> i'm so glad farley is doing this they've done by far the worst in china. mary barra, gm, has done much better he had a good quarter and nobody seemed to care this is really much needed david, he was getting his butt kicked in china. he's a winner farley he raced well this weekend, by the way. i think, david, when you see that, what you recognize is what carl is saying, china is a lot harder than we thought, let's get out if we can't win. that's a big deal to see farley admit, you know what, we're not winning in china, we're not going to lose in china i like that. >> really quick, guys, let's touch on depot today

down in the premarket but off the lows of the morning. the company posted its worst quarterly revenue miss in about 20 years, citing lumber deflation, bad weather, software demand they expect comps to go down two to five. transactions down 4.8, jim how much of this was a surprise? >> the california aspect -- one-fifth of the country is california we should all be able to figure out the weather is bad, whatever there was softening demand throughout the country this is a continual theme, hard goods. it could be grills this time, appliances we are full up as a country with everything we need we bought everything there was to buy for our homes, and the new projects are not as big as we thought we have unbelieve li low mortgage rates so people don't want to move it's a static world for home depot.

home depot is such a great company, they're going to do just fine. carl, the more i think about it, the more i realize the era of covid was so fundamental in how we spent money that we bought every pc we needed to, bought every appliance we needed. suddenly i start thinking, well, if we lose travel, then maybe we're just hunkering down. by the way, david talks a lot about commercial real estate there have been changes in the way that commercial real estate is recognized. banks are supposed to be recognizing right now problems i don't know how many banks are recognizing. you're going to come to this zone, david, where the only thing people are buying are cars you'll help us on that >> jim, when is the last time these guys lowered expectations in this way? >> this is 20 years, 20 years. it's rather incredible.

>> which is interesting. if you look at the consumption -- the breakdown of retail sales this morning, building materials was actually positive sporting goods, department stores, furniture, electronics, jim, to your point, all negative >> yeah. yesterday it was barely looked at the announcement with dragonfly was so exciting. sporting goods, holy cow dick's has some good numbers anything that's hard goods i certainly don't want to be in that industry. now, i had whirlpool on. whirlpool had a lot of supply chain problems, they bought insinkerator and they're doing that they would say we yield 5%, have a lot of cash. that's not been a reason to buy things there's just a sink overall that the consumer is reconsidering everything carl, i didn't think that would happen so quickly. >> interesting note out of bernstein on pcs, on semis, stacy rascon argues maybe

another quarter or two >> rascon is right what's going to happen, there's going to be a new system i don't know of the time frame, but advanced micro is working with hp to develop the next generation pc. the next generation pc will get people off the couch we haven't had a reason to do it western digital yesterday in the potential merger with the japanese company is getting ready for this micron stock was up huge, sanjay, getting ready for this sanjay is a two quarter away guy, if i can put words in his mouth. i think intel is going to be left behind. the ones up now are largely auto taiwan semi is everything. when you look at lam research, that's the best example. lamb is doing well they should be doing well if there's no new chip being made

that could be the first deterrent because there's something -- i don't need a new grill. i have seen the world -- >> the grills get better. >> my grill, i have a weber. i saw a trager and saw a blackstone, i'd rather give my money to larry fink than give money to blackstone. i will say this, i want a new pc, a pc i can talk to and say, listen, i had a great time last night at gramercy, could you book me there again? that's what's going to happen. >> a lot of fed speak and now more data with ip. let's get to rick santelli >> expecting our read out of april for industrial production. hitting the buyers for industrial production, ex-peration are for unchanged, up half of 1%. that's the nicest since january when it was up nearly 1%

if you look at utilization, 79.7 exactly as expected. light with respect to the veer view mirror which stands at 79.8 in the veer view mirror. 79.7 is the lightest level since february we see that utilization rates remain a bit sluggish, under 80. industrial production definitely ramped up a bit. late revisions coming in, 79.8 for utilization last month, drops down to 79.4 we see interest rates are up across the yield curve much of that was better-than-expected retail sales at 8:30 eastern. "squawk on the street" will return after a short break ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently.

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futures trying to process a boatload of info musk with faber to night on cnbc we'll get cramer's mad dash after the break and the opening bell in about 11 minutes i'm barbara and i'm from st. joseph, michigan. i'm a retired school librarian. i'm also a library board trustee, a mother of two, and a grandmother of two. basically, i thought that my memory wasn't as good as it had been. i needed all the help i could get. i saw the commercials for prevagen. i started taking it. and it helped! i noticed my memory was better. there was definite improvement.

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♪ ♪ as we wait for the opening bell, let's get cramer's mad dash. >> i just enjoyed watching becky doing a great job with warren and charlie. it was a great clinic. one of the things they talk about, they're sane people, rational people. they bought a stake, $950 million in capital one to many viewers capital one is a very high, expensive credit card that you use to me capital one is a guy by the name of fairbank, the ceo, who has managed every downturn how did he not get wiped out by people who took credit cards down with high rates the answer is he's one of the great lenders of our time.

i happen to like fairbank very much he taught me how to do this. a very methodical way to say this is how you lend b buffett's endorsement. it looks like there could be a revenge trade to people who feel there's money coming out of the ba banks, typically the ohio banks and an endorsement that capitol one is doing -- >> not to mention resumptions today for western alliance and first horizon. >> first horizon, that's why i spoke with brian jordan. doing so well. $a 13 billion bit. they're doing fantastic. it's all systems go. there could be capital one, first horizon, plus western,

maybe the shorts have had their day. by the way, schwab >> stable year on year in april. i think that steve sweerry has done a wonderful job getting no credit whatsoever. a lot of people including jordan from first horizon who have been conservative good bankers. it's a shame they cagot caught in what was a rogue bank. we'll get to upgrades of expedia and rcl. opening bell coming up in about five minutes don't go away.

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>> doesn't seem to me like they want it. seems like they want to look like they're in a meeting, but not talking anything serious

in the meantime, we just watched the ceo come out and say we're $100 billion further in there. it seems like they want more of a default than a deal. >> that's speaker mccarthy yesterday. the president and mccarthy are set to resume discussions. meantime yellen says, quote, time is running out and even what's happening right now is costing us >> t >> what she hasn't commented on was tax receipts were really light. could there be a may surprise? that will certainly hurt the president because the president is going overseas. >> tomorrow going to japan i think it's a very ill-advised trip when you heard speaker mccarthy, you don't know if he's in control of his party he doesn't want to lose his job. i think giving in on the first

proposal will lose his shot. i know the speaker, he fought hard to get the job. he's not going to say, okay, we've got something with biden, let's roll with it that's not going to happen. >> we have sound of what the treasury secretary said just a few moments ago. listen >> the default could cause widespread sufferings as americans lose the income they need to get by, and the resulting income shock could lead to a recession that destroys many american jobs and businesses fall would crack open the foundations upon which our financial system is built. it's very conceivable we'd see a number of financial markets break with worldwide panic triggering margin calls, runs and fire sales >> not unusual if you go back to 2011, there was a feeling that all these

things could happen. then after the debt downgrade, the stocks that rallied were all defensive with the exception of chipotle so what i do fear is people don't recognize -- [ bell ringing ]. >> we'll monitor that action this afternoon in the meantime opening bell at the big board it's remedy, a science-based company and at the nasdaq, women in global. bofa pointed out, if you look at the s&p or gold or the vixx, they're pricing in 4, 5, 6% probability of a crisis. it's the rates markets that are double there the rates markets are saying, listen, it's not going to come together by the way, copper is up you can say that's china

copper is terrible the defensive stocks continue to act well then the super techs today are taking a breather, but they tend to come back i still believe there's a level of hope here that is shocking given the level of rancor there. i don't get it it isn't like speaker mccarthy is saying we're closing in he's saying we're going four ther carl, i have no reassurance whatsoever that things are going to work out well the president getting on a plane? he better cave this evening. dave >> by that you mean -- >> listen, we're willing to make substantial cuts we're willing to do what president biden did. when you look over minute by minute, almost like the cuban missile crisis it was a profile in korj, to borrow something from president kennedy, where the president said, okay, i'll do it i don't want to do it, but i'll

do it. >> yesterday we talked to larry tribe about this 14th amendment legal process which he argues is the only way to clear the decks unless you want to keep doing this year after year after year. >> you know, though, i've talked to a number of people who wonder whether we wouldn't still get a market reaction of some significance should the 14th amendment be used, guys, and it wouldn't necessarily work in preventing some of the very things that yellen just described, even if you were to do it with the prospect being it would go to the supreme court and there would be this judicial review, of course, as to whether it actually is constitutional. i don't know, jim, what you've been hearing most of the people i've spoken to about this as a possibility have dismissed it more because it wouldn't necessarily help to calm the markets in my opinion. >> you have to look at who the supreme court is made up of.

if anything, those would be trialing days of our markets you and i might be thinking should they close the stock exchange should the stock exchange be open during that period? it would be, as we wait for the courts to hearing the arguments, we wouldn't be able to pay anybody anything i don't think it's weird to think that the stock exchange can't open >> we're not going to revisit that again, are we by the way, those yell loan comments, guys, has she been as concerning as she just was there in terms of what she said? has she been using that language. >> that was a new fright level that was a fright level where she's basically saying it's catastrophic i'd like to think that those words would mean that the president wouldn't go to japan that undercuts her whole catastrophe thesis well, it's catastrophic, but i'll talk to you later

no, it's catastrophic. i'm canceling the trip and we've got to get it done it does seem fanciful. >> i would hope, jim, and i think there are others who believe as well that, while it is difficult to measure tax receipts and the date did move up on us, that they have given themselves a bit of padding here it really isn't june 1st, probably the middle of june if not later. >> david, there's only one man i want to hear from on this, and his name is elon musk. >> don't say it. we're not talking about the debt ceiling. no so many other things. >> okay. all right. but i do feel that i did not like the language of yellen. it seemed to directly contradict her president, her president who is being so calm and being so i'd say reassuring where, david, there's no need to reassure. when you look at that month

t-bill, what is that thing saying to you? it's not zimbabwe. or is it the deflation of vimar. we keep acting as if there's something -- in the end there's this great meeting and everybody hugs each other? >> no. that doesn't say bye, bye, bye to you right there >> no. i've not hitting that button >> there is a bofa survey today. will the limit be raised by the x date 70%, yes the investor base believes it. >> the one thing that's good is that the captions are the same as 2009. david, the republic -- when you're in another country. let's say you're in very

well-run countries that are emerging democracies in east asia, david, they're laughing. they want to tell us, you got to get your act together. you taught us how to get our act together now you're behaving the way we did before we realized there's a way to have a budget and run of country. we are not among the council of nations when it comes to figuring out how to pay our bills. >> clearly that seems to be the case, jim. we all hope for other ways, maybe in the days ahead. guys, i want to stay in washington, but a different story, but one certainly reverberating in my world of m&a. our ftc, very aggressive ftc reports it will seek to block amgen's purchase of horizon therapeutics this deal was announced a while back, supposed to close as soon as may 23rd, worth about $27.8 billion, cash deal

there you see horizon's shares down sharply a lot of people caught on the wrong side of this, but the expectation of what would the ftc see here as a key problem, but they apparently do this is reports, although a wide variety of them from news organizations of good repute we'll say it seems likely and not perhaps unexpected from this ftc. elizabeth warren has expressed concerns about the deal as well, talking about brazen price increases by both companies, particularly about amgen's 'em umbrella, an arthritis drugs two fast-growing drugs here, both orphan drugs. the question now will be what do we hear from the ftc where do they file do they file in california where they think they might get a

sympathetic judge? do they go with an administrative law judge like they have so far with microsoft/activision jim, there is this larger question of innovation so many of these companies, smaller companies attract the funding, get the science, get the drugs to a point where then they can sell. if you cut that off as a possibility, one has to wonder whether you also are cutting off, at least to a certain extent, some pipeline of innovation here because you don't have the prospect of an easy sale if the federal regulators are going to say no, no, no. >> david, i do a lot of work with the american brain foundation, american migraine foundation you're hoping that the companies that are really good get to communicate and judge, companies that are smaller, to figure out how to conquer disease you'll have a company like amgen doing work on lupus, a terrible disease. it's entirely possible you may

see something from horizon that's really good on lupus. lupus people, they don't want this, the government they're saying this is a case where it's absolutely certain that there be competition between horizon and amgen. david, this is antithetical to how you figure out what drugs might work you can't have an outfit like -- everybody say, if i'm in cancer, i'm going hard because they don't know how to do heart amgen has an expertise here that's not being allowed to be used i thought this was shocking, david. when i do this stuff with the brain foundation, you can't have a company very good at developing artificial knees trying to figure out what to do with the cerebellum. >> yeah. you're not alone, of course. you're not alone given the expectations as well that this deal would get done, $116.50 for

each share in cash, of course. it was a 48% premium to the close. that was back in the fall, late fall when it was announced you're not alone, jim. you can see from market reaction there was not an expectation perhaps built into the marketplace. some, but many thought -- there were reports the ftc was meeting over the weekend people were like, come on, are they really going to try to challenge this one, too? apparently they are. we have yet to hear. >> i get it with activision. but if you're amgen and you found something that might be great for lupus and you have a real army of people who can help, wow. if you have lupus right now, you're thinking who the heck is lina kahn to make it so i might not have a drug that could change my life that's who you're going to be up against if you push this stuff this isn't jonathan kantor saying stephen king says we need five publishers.

this is something about every mother in this country with a kid that has lupus saying, is this really the way we're going, not having a great company get together with a small company to try to cure what my son or daughter has i think this is outrageous this is the overreach that i hope somebody like amgen takes them to court and says this has to end this is a tyranny of price versus hope. people who have lupus should be up in arms about this. >> meantime, jim, we mentioned some of the upgrades in travel doing pretty well today. expedia up by gordon haskett artemis takes royal caribbean to buy at 88. these consumption numbers goldman says are even better, and retail sales -- >> caribbean is a great bargain. we have this thing -- this wave season everyone had a great wave

season royal caribbean did a giant equity offering, still a little bit higher they preserve themselves unfortunately frank del rio is retiring at norwegian. the only ones i'm hoping for, where is the disney cruises? are they such an irrelevant spec versus, say, maybe getting a saturday night playoff game in the nfl? >> what was the question, jim? i'm trying to pick up on that. a lot of bird traffic in my ear. >> disney has cruise ships it's not that big of fleet you do recognize disney has so many good things, but that in the end we're still dealing with the idea of the debt load and of linear, like you keep talking about. here's these companies just doing so well on travel, you would think disney theme parks would be the focus if they're the focus, they're only about a governor versus a

ceo. >> that is certainly capturing a lot of people ace attention, the continued attention between governor desantis of florida and the company, disney, what they're allowed to do or not do in orlando we don't talk about the cruises too often, but we do talk about parks which is, by far, the real engine of profitability at the company right now. fortunately, jim, not the sole engine i hear you saying positive things are you trying to say $91.96 is a good spot? >> i certainly am. i look at the situation there. you get the right ceo in bob iger is going to try to find the right person you look at the ip and look at the valuation -- pretty much by anybody, certainly versus other cable companies and say this is just wrong it's just wrong. >> on a similar vaen, netflix

says the strike may be delaying the rollout of paid sharing because it is a price hike he says netflix may not like the look of raising the price when you have 10,000 writers on strike. >> netflix is a different kind of company they're noed toward can we make the quarter, but can we keep the creativity going. maybe that's one of the reasons it's so separate from what we see with the other guys. david, there's a company that's a kinder, gentler company in netflix. that has historically gotten people to write for it who would write for much more money elsewhere. it seems to be a strategy that's worked >> i think david is out of the mix for now. >> oh, perfect >> you did make the point that depot was off the morning lows. >> i think when you deal with a company like home depot and realize the company was at 347

and has come down a tremendous amount, yeelgtds 3%. it could have a buyback and unlimited fire power, i don't want to be the guy that says i'm going to sell it down to 3.5% yield. >> read through to lowe's and are target tomorrow. >> there's commentary from home depot that the do it yourselfers is at hope depot that's been marvin ellison's -- the strong point has been do it yourself as a gardener, home depot used to talk about christmas. they got so bogged down by what happened in california and the notion of hard goods being full off, that you have an undertone that's down beat we're not getting that about travel you have royal caribbean, american express, expedia. people are still traveling

the house is a home. >> people have really fixed it up they're not moving the mortgage rate is too low to give it up it's rather extraordinary. >> there have been charts circulating if you look at open table, seated diners beginning to soften in recent weeks. >> bank of america credit card was a little weaker. >> it reminded me of shaq, looks like an agreement with engaged on adding a couple board members. >> i know liquor sales are down a little kind of interesting. dry january continued more than people thought that was highly unusual. there is different generations spending like mad and other generations that are conserving. there's an undercurrent of lay-offs where people are losing their job in what looks like a very vibrant economy the most mixed picture i've seen in many years. >> china we've got baidu and ten cent

with double beats. michael burry doubling down on back ba and jd, which china tech is almost 20% of his portfolio. >> look, the chinese historically have done this to us over and over again they make us realize we're the most vibrant market. you've got to put money where us i don't think people recognize the prc can put its finger on the scale and make any company look better. i say that because look at nike. nike has good chinese business and the stock is doing quite terribly here. if you own starbucks, you heard a company that says we're plus 3, minus 3 this quarter. that's not what i wanted to hear you have individual companies not doing well except the big chinese companies that are saying come hither i don't like the come hither trade. >> lucy and the football, a bit of that? >> yes. >> take a look at the market dow is down about 90 by the way, we're getting a ton

of fed speak we have mester, bostic, logan. bostic again tonight the short ends up 4.05 the ten-year almost to 3.55. don't go away.

bunch of headlines in the energy space today the iaea says demand will climb on what they think is a china recovery and raise their forecast by 200,000 barrels day. granholm starting to add to the spr. >> usual suspect we need to see more economic demand to get that thing rolling. >> also russia production way above what people expected. >> that's classic. they need the money so badly. >> 7161 on texas

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time for jim and stop trading. >> i have my investment club meeting tomorrow at noon i hope people join the club. we've been buying foot locker because mary dillard is there. one of the things she's done she's introduced on holdings in a way to foot locker they reported a quarter this morning 78% growth, good gross margin they did to the raise their ebitda, earnings before interest and taxes, they raised their sales. maybe things aren't as good. come in and buy. this is the fastest growing footwear company in the world doing incredibly well. i will be saying that tomorrow the stock up 79% you're going to see profit taking but it is a good story. >> we'll get foot locker on friday, right? >> yes mary is -- look, give her time it took her a while to do ulta,

but when she turned ulta ulta became the growth story of our retail era you can't do it in two quarter quarters. >> a little bit of a spill here. back to 4120 we're going to be plastered to our screens watching debt ceiling tape. >> i think the comments by janet yellen were -- i thought they were out of keeping with what i was hoping and i just think when the president gets on a plane, maybe the speaker's time to say listen, i had a deal, where was he, and that's all bad. >> we'll be watching the tape closely today. we'll see you later. dow is down 170. yields as we said higher we'll take a break oh look at this sam altman. >> fantastic. >> this hearing on the hill talking about a.i. regulation on a day where we have nadella talking to sorkin and we'll watch how the senate views a.i. oversight in the hours to come that's a big story for us today as well. don't go anywhere.

good tuesday morning welcome to a big hour ahead on "squawk on the street. i'm sara eisen with carl quintanilla live at post nine as always at the new york stock exchange david faber joining us today ahead of his big interview with elon musk later today after tesla's shareholder meeting. we will get to that in just a moment two senate hearings in washington, d.c., happening. former silicon valley bank and bank executives testifying before the banking committee on their failures and then the a.i. arms race is in focus, too openai chief sam altman set to testify before the senate judiciary subcommittee on the oversight of artificial intelligence we'll be monitoring both of those hearings throughout the hour and bring you any headlines. first time we've heard from mr. becker from svb. markets trying to wrestle with a bunch of different pots boiling. the debt ceiling negotiations this afternoon

home depot's revenue miss and the downward guidance. bunch of fed speak some of the macro data has been mixed. retail sales return to growth for the first time since january. fresh data on the tape which rick santelli has. hey, rick. >> yeah. business series for the month of march expected to be unchanged are down 0.1%. you know, inventories being down is a very rare negative month over month feature we now have two this year, both january and this read in march, down 0.1 didn't have any negative reads last year. we do see that interest rates are moving higher, but it isn't because of business inventories. national association of home builders, housing market index for may, is out and that may have some surprises and for that, let's head east to diana olick. >> rick, home builder confidence in the single family market rose 5 points to 50 in may on the nahb 50 is the line between positive and negative, so it's the first

time the index has not been negative since last july the street was looking for a 1 point gain this is the fifth straight month of gains both say it's due to low supply of existing homes for sales, sending buyers to new construction they note that the industry still faces several challenges, including building material, supply chain disruptions and tightening credit conditions for construction loans of the index's three components current sales conditions rose 5 points to 56, sales expectations in the next six months up 7 points to 57 and buyer traffic increased 2 points to 33 new home inventory is now making up a third of the market historically it's usually 13%. the builders said incentives helped, but they are winding those down the share of builders lowering prices has dropped for several months as has the share of builders offering any kind of incentives. >> diana, thank you. continuing to see improvement there. diana olick. we'll react to the numbers and home denot a moment.

david, we have to start with you in austin, texas, ahead of a big interview. we do not hear from elon musk very often what are you expecting as we go into the shareholder meeting >> yeah. well, you know, no shortage of topics to discuss despite how often we hear from him because things in his different worlds change quickly the focus today in part will be tesla, its annual shareholder meeting will take place aprior o our interview and we'll ask him about the automaker and follow up on comments he made during the conference call, not that many weeks ago, and tesla reported earnings and anything said during the meeting itself that is news worthy. even since the last time he communicated broadly with somebody in terms of an inte interview linda yaccarino joining twitter, shareholders want to hear an answer to, are you spending more time with

tesla now that you have more time on your plate once you hand over the reigns as ceo of twitter. so sara, no shortage of topics, whether tesla, twitter, spacex, starlink, a.i., i don't know if you have any requests but let me know, i'm happy to try to ask. >> i'll send you some. i think -- i mean i'm actually curious about his relationship with the biden administration because they've held a number of ev meetings and he's not been included in all of them and it's such a major priority for the administration to get into low carbon electric vehicles future, and i'm curious just how much cooperation or disdain there might be for mr. musk around that as an idea. >> that's a good question. it's a good question and had occurred to me because he has made note of the fact, and it seems almost impossible to imagine you would not invite the tesla ceo, elon musk, to an ev summit but they did it they didn't invite him they invited ford, gm, and not

tesla. we know why. of course it would seem to be they aren't a union shop things are not necessarily on great footing, but it's a worthwhile question and one of many we'll ask not sure we'll ask about the debt ceiling, maybe we won't go there. >> i mean, there's enough, there's so much with everything else he's working on tesla's stock is interesting up 34% this year but about 50% off the highs and had a rough year last year. >> it had a very rough year last year china is something waeflds love to get sense on given the conflicting data that you've been reporting on, sara, in terms of some numbers coming in good for companies that do a lot of business there and others not quite as good, at least in terms of the measurement of sort of overall consumer demand. so, yeah, that figure is prominently into the movement of the stock price, obviously, pricing, volumes, remember the

last call they discussed the fact that they could price these things at virtually no margin but over time believe they will still make a great deal of money as they move with full autonomy and the money with those upgrades yeah you know, the only question for me is will we have enough time because again, i think there's so many different things with him. >> sounds like you have a good chunk of time and can't wait for the interview. good to see you in austin. let's hit some of the news here, data and earnings in the u.s home depot shares declining seeing worst revenue miss in about two decades down 4.2% compared with the first quarter of last year as the consumer pulled back on spending. results hurt by the weather and falling lumber prices and here's the key, the company lowered its fiscal year sales forecast that were just put out in february. so they were fairly new. it was fairly new guidance they expect comps to decline negative 2 to as much as negative 5%.

clearly things are changing in their category with the consumer lumber, weather, but also just demand for doing it at home, making your own home. >> i was reading their commentary, we see softness in big ticket categories, patio, grills, appliances, likely defefrl of these single item purchases and pull forward in addition, though, demand softening across other parts of the business like flooring, kitchen, bath, which they argue may reflect consumers having done, sara, large projects moving on to smaller stuff around the house that they didn't get to before. >> yeah. well the transactions were down and that i think is reflected. they also, you know, just on the call which has gone on in the last hour talked about the impact of inflation. here's a quote from edward decker the ceo of home depot, build up of inflation we've seen there's price sensitivity with respect to those bigger ticket discretionary items. in general our homeowner

consumer remains healthy it's a matter of digesting the outside growth and shift of consumption spend out of services into goods and particularly into home improvement. something we've known, but the street didn't know how extreme this was going on. it does bring you back to retail sales which we got today the number sure we return to growth in april, up 0.4% on the month. that is half of what the expectation was. there's something for everyone here worried about the consumer there's plenty to be concerned about. the consumer in good shape plenty for the consumer to be in good shape category by category it was about half of the categories actually growth. seven out of 13 rose advances at auto dealers were up, general merchandise. >> e-commerce was the -- that was the surprise, in fact what goldman said was at least the surprise to them and while they'll have to raise their q1 consumption numbers. the idea we're not done buying

online after the time in covid took some by surprise. >> we're adjusting our habits, the other fact, to i saw bond yields rise, the control group which feeds into gdp, up 7%. that was the most since the start of the year. that's another reason, at least to be more bullish on the growth picture, but the only services sector in retail sales i wanted to point this out, is restaurant and bars, that was strong, too climbed 0.6% big year over year jump. that is something, if anything here, that fed is going to be looking at because they're worrying about the heating up of inflation and the services sector. >> restaurant and bars, even though -- i was telling jim open table seat at diners has softened but not enough in april. >> still high year over year, where the inflation is, still where the consumer habits are. the fed put out a really good paper this week actually about consumers and just how much stimulus is left, and it showed first of all how much stimulus we got during covid, but the authors of the paper suggest if

we follow the current trends of how that stimulus has come down, it basically gets us to the end of the year or 2024 for the stimulus to rise here's the fiscal stimulus in 2020 versus the other recessions and wonder why the consumer has been in such great shape they say expiration end of year 2024. >> a bit of a runway left. we'll see how much they hang on to or if they want to keep extra in the bank to be safe two hearings on capitol hill today. leslie picker is monitoring senate banking hearing into the failure of svb and signature but first to steve on this a.i. hearings hearing hey, steve. >> the a.i. hearing with openai ceo sam altman is starting in the room behind me giving his prepared testimony in which he gives his idea for a.i. regulation before we saw him shaking hands and chatting with senator blumenthal and koonce, playing nice with everyone, last night

he was at a dinner with the members of the house playing nice showing them about a.i. what he's calling for in his prepared testimony is regulation saying we should create standards to license a.i. technology this is an idea that you create standards to what a.i. can do and get a license or some kind of agreement from the government agencies to deploy that a.i., but it has to meet safety standards first. that's his idea. another expert on the panel, ibm's christina montgomery coshares their a.i. group and has an idea group called regulation where they go after certain things in a.i. saying what it can and cannot do. a different idea from ibm here, but look, the hearing is just getting started and we'll have more clarity on the visions of these people for how a.i. should be reg glitted and from the senate members as well. >> keep us posted. steve covac on the hill. >> to leslie who is tracking the hearings into svb and signature

bank lessy? >> sara, former executive from silicon valley bank and signature bank appearing it in front of the banking committee, coming the failure of those two banks, began about 10 minutes ago. we saw senator brown who is the chairman of the committee discussing potentially incentive compensation plans that drove the decision making that led to the failure of those two banks senator brown saying that there's plenty of blame to go around, but just to kind of get in the minds of these executives in prepared testimonies, former silicon valley bank bank ceo greg becker offered apologies to the employees and described in his testimony unforeseen events that led to svb's downfall and says, quote, i do not believe that any bank could survive a bank run of that velocity and magnitude which was far beyond historical precedence. becker says after the silvergate failure in an article that linked the securities portfolio of the two banks $42 billion in

deposits were withdrawn in ten hours or roughly $1 million every second the co-founder of signature bank says that after silvergate failed, depositors withdrew $16 billion from his firm within a few hours. he will say he did not think regulators needed to seize the bank, with signature bank in a st strong position to weather the storm. saying the bank was quote well capitalized, solvent and had sufficient borrowing capacity to withstand these and future withdraws. he says, quote, he was disheartened that this did not come to pass guys >> leslie, i think the blaming of the fed is garnering chatter in that prepared testimony hey, the fed, it was partly the fed fault because they were talking about transitory inflation and we didn't think rates would rise so quickly. a lot in the markets point to the fact that powell pivoted off

that transitory and led to plenty of very clear guidance about how fast rates were going to rise and the need to inflict pain to bring down inflation, so it doesn't add up. >> greg becker pointed that out, had a whole point in his prepared testimony where he talked about how, you know, they were under the belief that, you know, inflation was transitory, that the fed would not embark on this rate rising plan as they did, that was the fastest, 12 month period in 40 years they say the fed was regulating these banks and saying, you know, everything looks fine. from that to an ultimate failure as sherrod brown put it, there will be plenty of blame to go around, expected over the next few hours in this hearing. >> seems they made the wrong bet. they lent low and borrowed short. thank you, leslie. leslie picker. we'll monitor that as we head to break our road map for the hour, includes a closer

look at the fresh housing data we got we'll talk to one of the nation's largest home sflupplies next. the 13 fs revealing moves by tepper, ackman, penalties, you name it. >> more on tesla ahead of its shareholder meeting later today. big show still ahead don't go anywhere. dow down about 250

welcome back widespread reports this morning that the federal trade commission is poised to block amgen's purchase of horizon therapeutics, a deal announced late last year, 116.50 cash, $28 plus billion, one of the larger transactions we've seen. and not expected to really get a particularly tough antitrust review, in part, because there are no overlaps between these two companies and there was not seen to be a significant hurdle to mount when it comes to convincing the antitrust authorities that the deal would be somehow anti-competitive. but in this day and age, that doesn't mean much. widespread reports have the ftc commissioners voting or will

vote to block the deal that said, my understanding is, people according to people familiar with the situation, that those commissioners have yet to meet or vote and there has not been a decision. but one can imagine, given the journal, bloomberg, capital forum, so many other reports, that, in fact, the ftc is going to move to block the deal that is likely to happen. if that does happen, i am told that amgen will mount an aggressive defense, feeling like they not only want to win, but in the words of one person, win big. feeling that they have smooth sailing in terms of proving their case that this deal would not be competitive horizon has two fairly fast growing drugs ta pes sa and chris tech ya. they have orphan drug designation, i believe, and they are growing quickly. the deal was supposed to close a

week from today, and so not unexpected you would see that move by the ftc if, in fact, they wanted to there's the possibility, although i don't have an answer on this, would they consider closing in the face of it, given their confidence that they actually will win in court where they file, if they do, would it be in d.c. federal court, administrative law judge, we don't know at this point. it's a significant blow yet again and some would say to innovation, because many of these companies that develop the science, that bring in the venture funding and develop the science and therapies or the drugs, and then get to phase two, or even early phase three, then sell to big pharma, that's a key part of the business model and if you stymie that saying you can't do deals any longer and deals that even wouldn't seem to be anti-competitive are judged to be so, there is a concern that would end up stifling innovation, certainly yet one of many arguments, sara, that amgen may make as it waits

to see what ftc chooses to do and is prepared to go to court to defend the deal. >> piper sandler writing a note if they stands we have to think differently about biotech investing. it was a huge merger play, this horizon. so a lot of people getting hurt by this. thank you. we'll continue to check with you. want to hit the home builder confidence numbers that hit at the top of the hour. they rose for the fifth straight month of gains according to the national association of home builders let's get into the health of the housing market with the largest suppliers in the u.s dave rush joins us builders first source ceo. it's his first national tv interview in the role. it's good to have you. i didn't realize what a juggernaut your stock was. $15 billion stock that looks like a moonshot of a chart trading at all-time highs. i thought it was a tough housing market what's driving this? >> thank you, sara it's great to be on your show.

what we've seen is effectively the monetization of our strategy back in 2021 when we merged with bmc we had a strategy around improving our footprint, focusing on value added products and that strategy and growing through m&a to fully develop that footprint that strategy is playing out and we're seeing that as we see the resilience of our business model in this even tough economy and the affect its had on our stock price. >> so are you correlated to what's happening in the housing market or not seems like your clients are the builders, right? >> we're certainly correlated to the building community and as rates went up, what we saw is home buyer demand going down what we saw in the first quarter, though, is as rates inched down, the home buyers

returnsed to the market. that validated our premise that home building is under -- is under built. and customers are out there looking for product and the appetite for housing in general over the long term is strong you saw that as interest rates inched down and buyers returned to the market. that we believe has led our customers to understand that q1 was not as bad as they feared. they're showing and reporting that customers are, and their sales, are better than they expected them to be. the word i hear more common now is stable. and in an environment that's stable, we believe housing starts over the full year will be down minus 10 to minus 20%. that's better than we expected and in that environment, our geographic footprint, our product portfolio, and our inmarket exposure where we

diversified into multifamily in the last 12 months, we believe we'll be able to maintain a double digit ebitda. that's reflected in our stock price. >> i wonder if you've been surprised in the way in which home buyers have become accustomed to the rate environment. did you expect them to assimilate so quickly? i wonder what you think would happy to demand if we got the kinds of cuts in interest rates that at least the market is betting on >> i think you see me smiling. i believe what the home buyers were looking for was stability i think as markets, as interest rates kept rising, that did create significant concern but once they stabilized, i think that's when people figured out the affordability equation they may have gotten the smaller house and fewer options, but they still got into the house. they can add those things later down the road. but what i do believe that's an indicator of is if interest

rates do start to retreat, i think we're going to see, you know, demand return to the marketplace in a greater extent. our plan all along was to manage what's right in front of us in the quarter, but we're not sacrificing the long-term for the short-term we've continued to look for ways to add capacity because when that does turnaround, we want to be ready for our customers to not have the kind of capacity constraints that happened during the pandemic. >> when i look at some of the products that you manufacture and provide, wall panels, vinyl windows, custom millwork and trim, engineered wood, how do you make sense of what we got from home depot today, which was disappointing comp store sales, lowering their guidance. is it just that the professional segment is holding up more than folks who build it themselves at home >> sara, i think you're exactly right. we do cross over on a lot of products with home depot, lumber

being the most obvious, and we were both impacted in the first quarter by lumber deflation. but we do focus primarily on the professional builder, both in the single family and multifamily segment and though we do have r and r it's less than 15% of our overall business and i think the customer professional segment, as i said, is at least stable and i think that's the difference. >> what are you seeing deflation, disinflation, still inflation? really quickly, in some of the materials and products that you make >> you know well, had such a run up in inflation during the pandemic that contributed to our affordability concerns for the home buyer as much as interest rates quite frankly. what we've seen and starting with the lumber deflation, that certainly helped al the other products have, in fact, at least stabilized. they haven't retreated you will see some products demanded by the national

builders, where supply maybe have been out of demand. you see some competitive pressure there in general it's been flat. the bigger concern for me is in labor. labor, skilled labor specifically, is still in high demand and as a result, it's continued to increase. that's where our focus has been. trying to help remove labor from the job site for our customers our deliveries post pandemic are back to where they were prepandemic. our -- we have 96% plus of our deliveries go out complete with one trip to the job site during the pandemic that might have been three or five trips. where our value added products come into play, we deliver those to the job site ready to install and that helps reduce labor for our customers. >> really interesting color there, thank you very much appreciate you joining us. >> thank you for the time.

>> builders first source ceo. >> interesting coming up after the break the road ahead for tesla as it gears up for its shareholder meeting today. why our next guest thinks the 'lock can get to 250 wel discuss that call when we come back in a moment. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

welcome back here's your news update this hour russia launching another heavy air raid on the ukrainian capital. the eighth missile strike on kyiv this morning. the ukrainian military says 18 missiles and nine drones shot down it's not clear how many were actually launched at the capital. the only injuries right now are three people hurt by falling debris. president joe biden and house speaker kevin mccarthy are scheduled to meet this afternoon to try to break the log jam on the debt ceiling if they can't, we're facing the first ever default on the nation's $31.4 trillion debt treasury secretary janet yellen

reiterated to congress the u.s. could hit the debt ceiling as soon as june 1st and striking members of the writers guilt of america say they will not pick elgts next month's tony awards telecast, but the guild says organizers are altering the show to conform with specific requests from the wga after the union denied a request by tony organizers to have a waiver for that june 11th telecast sara, i don't know what we're expecting. a lot of ad lib? >> maybe they will put news people in, instead. >> how about that. >> constaes, thank you. >> are you busy on the 11th. >> count me in lot of news people so, fill in those gaps contessa brewer. about an hour into the trading day. take a look at stocks. what's holding up today is tech. look at the nasdaq, higher the s&p 500, down a quarter of 1% thank you amazon, microsoft, alphabet, amd, nvidia and apple, suspects keeping the three sectors up information technology,

communication services, and consumer discretionary to bob pisani with more on what's moving and what you're focused on this morning. >> three to one, declining to advancing stocks and the s&p down 9 points and it's tech holding things up. look at the sectors. sara has it. microsofts a new high, nvidia a new high, moving the market. look at the cyclicals, metals and mining, industrials still continuing to sink there's retail down. no surprise there. look at the big retailers, the surprise is why aren't they down more i think the story the consumer is softening is pretty baked into a lot of stocks at this point, a lot of retailers. i was listening to the conference call with the cfo he emphasized over and over that consumer was basically pretty healthy and said there's a shift of goods -- out of goods into services the big ticket items are slower due to higher spending dur the pandemic and inflation, we all know this, making consumers more price sensitive. the consumer, the consumer is

slowing story is in the traders right now in the trader mentality and in these stocks. take a look at where most of the big names are. they're down 8, 9, 10, 15, 20% the numbers for the year we got the message that consumer is slowing the question is, how much. you know what's interesting guys, if you look at the few winners, they're really small companies and you think america was going camping all the time buying coconut water camping world is up. decker's outdoor is up boot barn is up. on holding they make the fancy running shoe - >> we have the ceo on next hour. >> deckers makes the other shoe that's doing well. we're all going to go camping and drink coconut water at this point. the state of the consumer, that's the question. where are we it looks like right now they're grappling with inflation and more worried about employment than a year ago. the tax refund wasn't great that they got the credit card balance is growing and 401(k) is not great.

would you be surprised if the consumer is slowing. just how much are they slowing here's what i want to see. how many are going to drop their earnings system for the full year home depot, remember, spring is their christmas okay the rest of the retailers are not like that. they have to do back to school and christmas. i'm wondering how many will be willing to say after three months the rest of the year is going to be lousy, let's lower the numbers. i think they would be reluctant to do that my bet you're not going to see a lot of companies lowering the full-year guidance that would be a very serious warning sign. >> especially back-to-back target and walmart happening it's been a more walmart world with groceries and staples doing better than discretionary. interesting to see if that trend continues or even intensifies as the consumer weakens a little bit. >> they would be a beneficiary walmart as you mentioned, more discretionary items moving out of discretionary into groceries and staples and things like

that the impression i would have, walmart is going to be fine. >> that's the story and target hurt more. >> others looking at the transports and arguing things are not moving in the chain the way you would think if they were buying big for holiday or back to school. >> the cyclicals have not been performing well a long time. we've been talking about not just the transports but global industrials in general, even the airlines haven't been that great recently and again, this is the sign. material names not doing very well the main argument now so make this go away is the china reopening is a bit of a fizzle oil is stuck at $70. it had a brief rally during about a month and a half, two months ago and now back down again. so we have to figure out where is the china play going and right now, the numbers are not opening up the way people had anticipated. >> and i think the bottom line on the u.s. consumer, i don't know if you would agree, as long as we have 3.4% unemployment rate. >> a ton of equity in your house. >> and still some excess stimulus that is coming down and

savings rates below prepandemic but isn't set to run out until the end of the year according to the fed paper the consumer isn't going to stop spending. >> the cfo of home depot emphasized 40% of the homeowners owned their home directly. no mortgages at all. he kept saying our consumer, the people who buy at home depot is very relatively healthy because of their home ownership and their spending habits. >> the inverse of '08. >> exactly. >> thanks. let's get back to david in austin. >> thanks. we are live in austin, texas ahead of tesla's annual shareholder meeting. i'll be sitting down with the ceo of tesla at 6:00 p.m. eastern tonight for a live interview. let's talk a bit about what we can expect from this annual shareholder meeting. joining us right now is analyst garret nelson, strong buy rating and a $250 price target on tesla's stock. garret, just give me your take

any expectations here in terms of news coming out of the meeting and/or at least some key questions that, perhaps, will be asked? >> sure. thanks for having me we think this year's shareholder meeting will be more anti-cli mat tick than past years because tesla had a major investor day just in march and so, you know, they really laid out their key priorities operationally at that investor day we think it is going to be a little more anticlimactic. there are five proposals up for a vote at the shareholder meeting. the highlight is probably the nomination of tesla's former co-founder jb stroble to the board. he departed tesla in 2019 to take a job with a battery recycling company called redwood materials and here he's renominated to join the board and we think he will be nominated and that will be a

positive tesla shareholders usually vote in line with the board's recommendations, which is generally what we're expecting from this. >> yeah. yeah perhaps relatively acquiesce isn't board meeting. coming out of earnings were there any key questions you continue to have whether it's pricing or volumes which got a great deal of focus after the conference call? >> yeah. the focus has really been on margins. tesla's margins have deteriorated significantly over the past year, and they're really, you know, taking steps in favor of boosting volume. prioritizing volume over margin. obviously, there's been the six price cuts that have been announced, but, you know, operationally we see a lot of positives. we think they're on track with first production of the cyber truck here in the next few months breaking ground on the new factory near monterey, mexico,

in the next few months and we also think that they will be introducing a mass market lower priced coop, that will probably be coming in 2024. you know, there's still plenty of near term catalyst that we see, and we really view this pullback in the stock over the last month and a half or so as a compelling buying opportunity. >> yeah. speaking of breaking ground, broke ground on the lithium refinery in corpus christi, texas, as well you know, i'm curious as to your thoughts about the storage energy business because that did come up on the call. many people see that as yet another perhaps lever for future profitability. what are your thoughts >> yeah. it's really an under appreciated part of the tesla story. you know, you're talking only about 6 or 7% of total revenue, but if you look at the top line growth in that business has actually been exceeding that of the vehicle business so we're very positive on the

energy storage and that part of the story. but, you know, i think near term you have to look at tesla is still growing their production significantly at a time when volumes are under pressure across the auto industry we're coming off a year with the weakest vehicle sales in the u.s. in 11 years they're really still ramping up these two new factories that they opened last year right there in austin and also in berlin so, you know, their production and sales growth profile is so much stronger than pretty much anyone else in the industry. we're really, you know, still very positive on tesla here. >> yep $250 price target with thestoc at 167 garret, thank you. appreciate your time. >> thank you reminder tonight i will be sitting down with elon musk. it will be a live interview here on cnbc. we'll air at 6:00 p.m. eastern

or so we hope, sara. given he'll be making his way from the shareholder meeting, around 6:00. >> he confirmed it on twitter. it's happening, david. we look forward to it. >> it's happening. >> yeah. >> after the break we'll turn back to the senate hearing going on right now on a.i. with openai chief sam altman taking q&a. a pair of investor heavy weights guggenheim's executive chairman alan schwartz and marathon asset management bruce richards, how eye th'rpositioning. the dow down 240 while the nasdaq is positive

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wire reporting the ftc has acted to block the transaction haven't seen the filing. waiting on that. obviously, want to see what jurisdiction they will actually try to potentially litigate. as we reported earlier, amgen is fully expect goed to go to cour and meet the objections that any seem to have about this deal and is confident it can overcome the objections in front of whatever judge they may be heard before but nonetheless, we had reported earlier that it had yet to happen, a vote yet to take place, but apparently now has and again, it's an important moment for antitrust action, sara, because very few people believe that on the face of it, this was a deal that should merit any action by the antitrust regulators not a deal you're seeing overlaps of any kind and so, you know, maybe they're listening to elizabeth warren who continues

to be concerned overall about drug prices and is not happy with the industry. >> sounds like both sides might argue this would hurt drug innovation and that will battle it out jim cramer was scathing on this. >> he was. very much so that is the key question and one you would expect that supporters of the deal would use in their favor saying if you're going to act to block everything out there, you are going to potentially stymie innovation by the companies that we rely on to do it before they get bought by big pharmaceutical companies. >> david, thank you. happening this hour, openai ceo sam altman testifying before a senate committee on the oversight of a.i steve covac has been monitoring this and joins us with the highlights of what we've heard so far. >> yeah. so the hearing just got started and, in fact, the questioning did and sam altman giving his open testimony here in that room right behind me and shockingly

just calling for regulation, saying we need safety, with he need a.i. regulation, before it gets out of hand and the technology develops more take a listen to what he said in his opening statement. >> however, we think that regulatory intervention by governments will be critical to mitigate the risks of increasingly powerful models for example, the u.s. government might consider a combination of licensing and testing requirements for development and lease of levels above a threshold of capabilities. >> so look, altman's idea to create these thresholds and barriers for safety around a.i. and then regulating it from there, giving people licenses to develop this technology, once they have proven it is saif under these standards and didn't get into too many specifics and going to happen more during the question which is kicking off from the senators. we have an expert and nyu

professor there and in his open testimony he's waiving the warning flag saying there are tons of bad use cases for the technology that's out there, being used today and so basically saying he's happy to hear people like sam altman come up and say we want to be regulated before it gets outs of hand, but he was really pain painting a dower picture of how the technology can be used there's optimism on the senator side they do see the benefit of this technology and want the u.s. to be a leader, but they are worried that things can get out of control like we saw with social media carl, i'll send it back over to you. >> good analog thank you. maybe a lot more impactful this time let's bring in former google and met executive to talk about this appreciate the time today. i guess i'm wondering whether or not you think altman's testimony here is useful and if it is useful, do the senators know what to do with it >> well, i think it is useful. i think we're going to need to have a lot more of these

discussions in government and these technology companies and third-party scientists will have to have those discussions because this technology is very complex. it has some amazing positive use cases, but without really having deeper understanding of this, i don't think government is in a position to really regulate it we've also seen in the u.s., we've been slow to -- we have no federal privacy regulation, unlike in the eu there's a lot here for the government folks to do in getting there. >> what do you make of the argument that, yeah, calling for regulation now that you're one of the key players in the industry is essentially pulling the ladder up from startups that are just getting under way now is that fair >> yeah. i think there is something there. i think, you know, this is also you hear the same thing from google talking about wanting regulation, wanting clearer guidelines i think there is an aspect of that, but i think also, these companies have to put in place a lot of safeguards as well on the

developers that use their tools. this is a case for openai and also the case for google so there's a lot for them to also do and it is a bit of -- an inevitable approach they will want regulation. they're going to want the regulation makes sense. i expect there to be a lot of back and forth in this discussion. >> you were at meta, right, senior director of product you were at google is this going to be harder or easier to figure out how to legislate than social media and the internet, which they never figured out? >> i think it's very difficult for example, if you just look at the case of google, not only is google going to provide tools that allow people to create ai-based content, they also have to care for how that product is distributed in their own content, whether youtube video or search, and they also have the problem i mentioned before, they have to police developers using these tools to third-party apis or cloud services so, you know, i think for some

of these larger enterprises, it's going to be more than just the content angle and what content is created whether that's misinformation or being used by bad actors there's going to be a variety of different fronts they have to address this and these tools and technologies on. >> meanwhile, rob, nadella spoke to andrew ross sorkin and argued the design choices their making are moving net-net in the right direction. he points out sort of why that's calling it co-pilot and not autopilot and it's a cooperative existence with these machines. is that legitimate messaging >> look, based on where these tools are right now, i don't think you can turn them into a full auto mode there's a fun video on someone had chatgpt try to play chess against bard of course, the results were quite hilarious. you're not in a position yet where these tools can be used in an automated way fully people are starting to string

those things together using their apis i think there have to be guardrails and we have to watch out for when these tools are used in a completely closed-loop fashion where there's no human oversight. but i do believe those things are coming so, i think it's the right discussion to have about preparing for that future right now. >> amazing that we're just getting started on this and learning so much rob, thanks a lot. we'll talk soon, i hope. rob leathern helping us with the senate hearings. dow down 207 got weakness in energy and materials but tech is coming to a rescue, to a degree. nasdaq still positive. stay with us

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i think disney recognizes, as anyone else recognizes, who is valuable. you get all the content from disney and fox with it in theory and, forever, so what's that

worth to any buyer, including di disney, or including comcast or including any tech company or whomever if it was for sale in that way that's the job to give us one-third of that value. so, i think we have a very valuable position. i'm not surprised with the comments last week and i think ultimately that will be good for our shareholders >> that was brian roberts, comcast's chairman and ceo, speaking not very long ago this morning at moffett nathanson media conference, talking about the future of hulu, which is the focus for both comcast and disney shareholders. remember, disney owns the bulk of that asset. there is an agreement in place under which comcast can actually put the asset back to -- back to disney at an agreed upon price that at least would be, it seems, if it's $27.5 billion,

33%, so about $9 billion, but they also have some adjudication related to that. there has been some discussion there based on bob iger's comments to me earlier in an interview, that perhaps disney would be a seller. that seems less likely at this point. speaking of interviews, don't want to miss it, 6:00 tonight eastern time after the annual shareholder meeting of tesla, we'll be joined by the man who essentially created that company and so many others, elon musk. we're back after this. ♪ old school wisdom, with a passion for what's possible. that's what you get from the morgan stanley client experience. you get listening more than talking, and a personalized plan built on insights and innovative technology. you get grit, vision, and the creativity to guide you through a changing world. ♪

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get more with nature's bounty. good tuesday morning i'm sara eisen with carl quintanilla live on the floor of the new york stock exchange. setting at again da. the street is betting rate cuts are in the cards for the fed, but one money manager says not so fast. bruce richards of marathon asset management says why one more hike may be ahead. what can 2012 tell us about what's in the banking system alan schwartz, former bair sterns see with us. the co-ceos of on ru