year probably not likely, but still, maybe a little surprising, the markets stayed in the green. 3.96%, not a big move in the ten-year either. oil, still below $80 at about $75 and in that range. is this it >> this is it. >> this is it. >> one and done, and she's so -- look at that smile on her face >> alarm clock goes back to, like, 11:30. make sure you join us tomorrow "squawk on the street" is next good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer in philadelphia. we'll get more on that in a moment david faber here at the new york stock exchange pretty busy morning. futures do pare some gains gdp price index, jobless claims with a one handle, ten-year yield continues to set new highs for the year at 3.96%. road map is going to begin with

nvidia going all in on a.i plus tesla's ceo, elon musk, says california is still the company's home, sort of. shares of alibaba rallying this morning after quarterly results smashed through expectations jim, we talked about why you're in philly yesterday, but remind us what's going on and what's coming up tonight >> what we've got is jamie dimon's coming here. he's doing this great strategy of going into unbanked areas, not just in philadelphia, philadelphia is a microcosm, but all over the country, and we're going to a place, 52nd street, i don't want to be too granular, but it's a part of town thapg has really suffered from the fact that there's not enough commerce, and when dimen opens a branch, we have demonstrable information that shows there's an increase in commerce, increase in people being able to create businesses, so that's why we're here he's giving us a lot of time today, speak at noon, involving some of the issues about the bank and the world

i think jamie dimon is -- it captures the zeitgeist, and david, i think you sense this, where people are a little bit gloomy because they don't know when the fed's going to stop they know we're divided politically. they know even though unemployment is incredibly low, it's no longer an asset. we're going to discuss all those things, and i know that jamie is pretty candid about these comments >> he is and i'm looking forward to your conversation with him, of course we talked a lot about, what was it, hurricane from dimon, downgraded to a tropical storm, but certainly want to hear his update on his view of the economy at this point, because so much has changed in such a short amount of time, or at least seemingly so, given the market's reaction of late, jim even what you said a few weeks ago could be different than what you might say now. >> right i think, carl, this idea of how -- and the minutes covered it yesterday how many rate hikes we need makes it so that there is guaranteed uncertainty now, jamie has often talked about, if you go over his notes,

this is a time of great uncertainty. that is a theme. so, i want to know, the level of uncertainties, how uncertain is this time? as far as i'm concerned, if you always say it's a time of great uncertainty, are you a boy who cries wolf is there an element of boy who cries wolf to jamie dimon? >> i'll tell you, he normally gives a nice, unvarnished view of the country's strengths and challenges, and i would be interested to see how that evolves tonight as well, jim that's going to be huge. looking forward to it, as david said let's get to nvidia, surging premarket after this quarterly beat and guiding above on revenue and margin, company positioning itself for what it sees as an artificial intelligence boom. this is what jensen huang had to say about a.i. on the call >> nvidia a.i. is essentially the operating system of a.i. systems today. it starts from data processing to learning, training, to

validations to inference, and so this body of software is completely accelerated it runs in every cloud it runs on prem. and it supports every framework, every model that we know of. >> already today, goldman upgrades in a big mea culpa note, saying, we were wrong to miss the run, jim. i know you said yesterday, don't expect huang to be too promotional, but he sounded pretty upbeat. >> he did think about what he is going to talk about in march when he does the big keynote when i go back and forth with him, here's what happened. jensen was always ready with this kind of artificial intelligence, accelerated computing, but he did say that chatgpt ignited a lot of interest in it he talked about reaching 150 million people in 60 to 90 days, and he said, there are many use cases, but what blew me away is he compares this to what happened with the pc revolution, what happened with the internet

revolution, and what happened with the mobile cloud and therefore thinking about what happened with the iphone i've never heard him like this even when i had dinner with him a few months ago, he did not realize how his vision would be accelerated. one of the analysts said, look, you said there's a $300 billion opportunity in software, over time, total adjustable market. he said, it's no longer over time, it's happening now, which is why nvidia, i don't know, i mean, we were kicking around, could it go to $300? yeah it could but you know what? >> you were not expecting this >> no. >> yesterday, you were -- listen, obviously, you've owned it forever, you've been a huge proponent of the company you said that yesterday, but going into the quarter, you thought there would be a more muted tone instead, they leaned into a.i. in a way that you may not have -- perhaps others may not have expected. he's all in and kind of becoming the biggest cheerleader out there, isn't he? >> 100%. now, there are other reasons to call the bottom in gaming, which

is pretty amazing. that's why amd is running so much call the bottom in the way -- the expansion of datacenters, which have been paused a lot of it is because of a.i. created a whole new division that works with oracle, that works with azure, that works with google cloud, which is basically the nvidia a.i. division that you have to use in order to be able to figure out how this can help you. the use cases are, in many cases, humdrum, but in many cases, more explicit but yes, i was surprised because jensen was surprised, and jensen huang is a true visionary. when he showed me how this works, when i was talking to myself, he said, look, one day, this is going to be common parlance what he said last night was, holy cow, i never expected this to happen so quickly, but it's upon us. everybody is asking for it we have a monopoly that's my word, not his. and by the way, once again, barry moore's law saying this is no longer -- moore's law is just so slow and can't be accelerated. >> jim, what is -- what is dgx

cloud? today, we're announcing nvidia dgx cloud, the fastest and easiest way to have your own dgx a.i. supercomputer just open your browser and dgx cloud is available already through oracle cloud infrastructure, azure, google, and others on the way. what is that what is the opportunity there? >> okay, so, that's a great question what he is saying is, look, maybe -- they give me some amazing concrete use cases colette said -- the fabulous cfo -- she goes, maybe you want to use it for -- to create text for marketing. the marketing copy you want to summarize documents. maybe you want to create images for ads. you want to create new video games. you want to answer customer questions. you need to tap into nvidia a.i. and do these things. you can do it -- i mean, basically, the companies i mentioned, the cloud providers, are just coming out to buy hundreds and hundreds of this

new chip that nvidia has by the way, there's no sign that this is ever going to end, except for their new iteration they are going to be making their chips that are needed for a.i. -- there's a shortage from day one. i mean, they can't make these fast enough. this is a new era, and when you hear about dgx cloud, it's the fastest way to figure out how you can tap into a.i let's say you're -- i'm seeing jamie dimon today, the ceo of jpmorgan he needs to contact nvidia right now and say, okay, i want to know, how do i do compliance can i get compliance done by this method? the answer is, yes maybe this method's better let's say he wants to do call centers. you know what? we don't need call centers anymore. we don't we don't >> i know. listen, it's -- >> by the way, jay powell ought to be involved with this, because we're talking about hundreds of thousands of jobs that will go away, because of dgx. >> and it's everywhere i mean, there's a brief sentence

in the conference call, they say they also announced that nvidia captured leading results for a.i. inference in a key financial services industry be benchmark. >> right >> for implications such as asset price discovery. >> you may not need people -- you may not need traders >> that's what i was -- yeah okay that's what i was kind of wondering. >> i found myself thinking, could these guys have -- could this thing have stopped a ridiculous call against the eagles by just saying, you know, we've analyzed that. artificial intelligence says it was not a holding call >> a.i. would have given the ball to marshawn lynch that's -- that would have changed everything you know, jim, it's interesting. >> it's going to be everywhere, carl and we all start -- we are going to have to fight for our jobs ourselves. >> there's a great note on microsoft today, and i'm quoting here "there are decades where nothing happens, and weeks where decades transpire. we're kpcurrently in the latter,

and i wonder, you've been emphasizing, you know, we're no longer in an era of zero cost of capital, meaning, you turn to things like cyclicals and materials, but what happens when we introduce a new structural growth story in tech do you go back >> well, i mean, they're doing it with mercedes they're making mercedes a software company they're finding a way to be able to take companies that are industrial and make them industrial software companies by simply just calling nvidia now, i have been after restaurant chains to be able to say, listen, you got to get rid of that box when you go in the drive-thru line, because headq artificial intelligence ended that, and you can put those people elsewhere what jensen basically said is, you have no choice now, because the other guys are going to do it, and a.i. understands people better than people understand people now, i know, david, i mean, this is not the end of moore's law. that moore's law is like -- that was like when you had that thing that let you have over 300 songs

on a device, and now you can have -- >> yes, the ipod >> yes that's what this is about. now, david, you will be skeptical until our bosses come and say, you know, i watched you this morning, and you know what? i also ran it through nvidia, and you're good, but they're great. you're not that good >> no, i get it. >> gpt is a parlor game, but what jensen said is, it showed you what you can do. if you decide, look, in compliance, people are saying things that they shouldn't, the only way to really capture is through nvidia so, every bank is going to use it >> yeah, it's early days, but i'm not going to be as skeptical as i was of the metaverse as i am, in any way this is a seismic change everybody seems to believe that's the case. when you get colette cress saying things the way she did on the call as well, just saying it's an inflection point, carl, everybody seems to be indicating the same >> ubs has a tutorial note this

morning on chatgpt, and they say, could this report have been written by chatgpt probably the report itself. >> yeah. i mean, jim, you're not going to need to read conference calls anymore. chatgpt will do that for you at the end of a long evening. you can actually sit down to a nice scotch or whatever you might choose as opposed to -- >> mezcal. >> just have chatgpt go through the nvidia call for you. >> let's say i'm bath & bodyworks and i say, listen, i type in, give me all the negative stuff, because they missed -- their forecast is so bad. within two seconds, it will have that just exactly summarizing what went wrong i keep thinking, you have people who answer phones right now at companies, speaking to customers. you will not have any idea that the thing that you're speaking to is not a person it's not going to be press 1 for this it's going to be someone who speaks more proficiently and

understands what you want more what jay powell needs to understand, every banker and politician, which of course won't happen, needs to be focused about what job does not need a person. if we have this low level of unemployment, this is the answer it will be within 18 months. not 18 years jensen's talking about 18 months >> yeah, yeah. >> by the way, nvidia does not have it. >> it makes it even more important, that upcoming speech that he gives every year, in march, right >> yeah, in march. >> we're going to get more details. gtc? is that what they call it? >> what will happen is that we'll understand -- like, when he says, creating images for ads, i mean, there's a lot of -- well, there's an ad for me for our investing club i am convinced that this -- you just say, listen, i want an ad that would be best summarizing why you should join the investing club, and probably within maybe three seconds, it will have it it will have the copy. it will have everything that's better than anything a human could think of i think humans are going to have to start assessing what does this do to their job

does it make it better, or does it eliminate it? >> well, they got a.i. doing price discovery, jim any job could be in danger >> i'm going to say to jamie dimon today, when i see him, every nonrevenue producer, every nonrevenue producer, what we used to call, at goldman-sachs, deadwood, sorry, will now be replaced, and jamie has to sit down with his division and say, i want this bought charlie scharf last night closed a mortgage division, laid off a lot of people at wells fargo what you can say is, look, i just want all mortgages to be dealt with through a.i i don't want humans involved it's too dangerous this is not upstart. upstart, which is a company i don't like at all. this is literally a way to be able to have it so that division closed, that division closed, this division now reports to that guy we can wipe that out and david, there's going to be a revolution in -- at the workplace, and all you got to do is read this conference call or have a.i. read this conference call, and you'll know it

>> yeah. yeah in the workplace or everywhere else since people, carl, don't really come to the workplace that often >> they're balking at four days. >> i'll ask jamie dimon, because i think he wants people to come six days pick saturday or sunday, it's your choice, religiously >> that building at 270 park avenue, that's going up. >> a.i. has wrecked that building it's a wrecking ball a.i. is a wrecking ball, okay? >> huge, huge, long-term ramifications, guys. when we come back, what elon musk is saying about tesla's new engineering headquarters in california and doing business in that state we're going to get to a bunch of names, actually, in evs, ride and lucid with news today. mi'sa netflix, papa john's, dono, lot more take a look at futures we're back in a minute “why.” no matter your purpose, at pnc private bank we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why?

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we're a california company we're trying to emphasize that, actually >> just a question >> we're kind of a dual-head quarter company. >> is this hq2 now >> i don't want to use those words. it is effectively a headquarters at tesla >> elon musk talking to cnbc yesterday about their new engineering headquarters in california he toured that facility with the state's governor, gavin newsom they talked about expansion with a focus on hiring engineers proficient in research development and a.i. jim, this texas-california split

is getting interesting >> look, remember when musk used to bash california there was really kind of a period where the people who were making all this money, who couldn't find the right talent or felt that the government isn't supportive, pictures with gavin newsom, i think, were rather extraordinary maybe a new partnership with california they don't -- california sees much more business-friendly. they certainly need it we certainly know that downtowns need it. they're using the old hp headquarters i like everything i heard, because california, masked by all the billionaires who made so much money in tech, is hurting, and the engineers that he is looking for, musk, they're available, because they're being laid off everywhere. david, the layoffs in tech are done in a very soto voce way, but you can get all the engineers you want versus 18 months ago >> mr. musk, himself, has led that and perhaps given cover to others who would also or perhaps would have not been as bold as they have been in terms of

layoffs, given how many people have been let go from twitter. we went from 8,000 to 2,000 employees is what i heard. >> and twitter's improved. >> it's down dramatically. but it is interesting to see him with gavin newsom, given -- particularly if you look that hs tweets over time, and it's hard not to, he has not been favorable to california. we all know he's moved to austin that's where he said the headquarters is, but this is clearly yet another headquarters he does seem to be making amends in some way with newsom, considered to be relatively progressive as a politician. although, he did start his life as a business guy. >> well, when you talk to newsom, he's so pro-business and he also -- a guy like -- he would understand that musk is a visionary that you really want to have in your state. i went to a launch last week to see what it was like to see spacex, and i mean, he ought to have a headquarters in florida

too. >> yeah. it's interesting musk going on to talk about california should be cautious about taxes and over-regulation going too far. again, this is what he had to say. guys, do we want to hit lucid as well >> after the break, we'll hit it they're both down pretty bad on some of these production guides. we'll get to that and cramer's "mad dash" and countdown to the opening bell we were higher before, claims in at a four-week low me2,000, and gdp price index ca in hot as well. we're back in just a moment. ♪ ♪ engineered to elevate the senses - touch, sight, sound, and scent. it's the electric that recharges you. the all new, all electric eqe sedan from mercedes-benz. see your dealer for exceptional offers

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absolutely committed to a 2% inflation target over the coming years, got some hot data today, and futures hanging on to green. don't forget the opening bell is coming up in about six minutes, and you can catch us any time, anywhere, just listen and follow the "squawk on the street: opening bell" podcast. back after a break

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. let's get to a "mad dash," back down to philadelphia. i want to talk a little pizza today, don't you >> they're calling it the great pizza rout, david. both papa john's and domino's reported very disappointing numbers and the forecasts are no better what's extraordinary is that domino's has a real slowdown, related to the shortage in drivers. i don't see a.i. replacing drivers, but i've got to tell you, you get a $3 tip if you come to the store. this has made it so domino's is a little less convenient the numbers were clearly disappointing, and there's no getting around it. we have to start thinking, what happened here? there's such a disparity between what they thought the revenues would be and what they turned out.

and papa john's, which i have on tonight, its same-store sales are just not growth, and what i think i'm leading up to is, this was a growth category, david, that no longer has growth, and i'm shocked, because it's been so good to go for so long. pizza hut did not have that great numbers either when it comes to yum so, maybe the great american love affair with pizza is -- has grown tepid. i don't know maybe it needs -- what does it need, counseling i don't know but the love affair has cooled >> my love affair with pizza will never end >> really? that's more anecdotal than empirical. >> that's just me. >> you're out of step. >> you think it could be a demand issue, or are you also saying it's -- because you mentioned drivers. is it just people ordering -- >> yes, there's demand and drivers. i'm going to speak to papa john's tonight that's been a one-way ticket higher, but they did miss, and these are -- david, this has been the one area of what i regard as being in the

restaurant business, unstoppable, because representing great value, people love the pizza, got to find out maybe the super bowl wasn't such a big hit. i know there are problems getting the pizza to you, and that is another job we can't find drivers for that's a problem for the fed meaning, sensing that it's -- yes, really, it's existential, david. we don't have enough people to take a pizza to you? that used to be, by the way, immigrants would come and work all the way up to have their own store by -- this was something that pat doyle talked about when he was ceo this was the great american dream, start driving to then owning a store i want to question whether the american dream still exists. >> got it. i still recommend eating pizza on premises if possible. that cardboard box just does bad things to it >> on prem >> you want to be on prem. yeah >> not in the cloud. >> no, not in the cloud. no that's one thing pizza's not in the cloud, carl, you know it's here and now. >> pretty remarkable

at least at papa john's, jim, digital transactions now 85% of the total. certainly we've definitely changed the way we order pizza, at least >> carl, that's why i -- that's why i say it's demand, because they got that down >> yeah. we've talked about how the technology has been for years. opening bell in the cnbc realtime exchange. at the big board, cno financial having its investor day at the nasdaq, it is ricky stenhouse jr. joined but dautry racing the host of consumer names this morning, not doing so well that's the pizza names, but keurig, dr pepper, wayfair, what do you think's going on? i well, the dollar general said that there were some storm issues, but i do think this is a rebellion against goods. we just do not see as many goods

being bought it's mentioned over and over on almost every single conference call in the meantime, i think that conference call that was nvidia ignited the nasdaq, because remember, we're talking a lot about a.i., but colette kress said, look, the inventory correction in gaming is over the datacenter build is good that's going to move up all the smh, even though i think the best way to play all this is to go buy nvidia. dollar general may be a little bit overreaction, but this was a preannouncement and quite shocking nvidia being up 26 should be no surprise given that jensen huang, who is brilliant, i always call him da vinci, did not see the quick adoption of what he's been saying could happen when i talked to him last fall, he was saying, look, this is going to happen within the next ten years. now he's talking about it happening in the next 18 months. that's extraordinary this is a man who is a visionary, but he didn't even see himself how quickly everyone wants to be involved that's going to go through the

whole -- reverberate through the whole food chain by the way, microsoft should be doing better on this google should be doing better on this but i felt his emphasis on oracle would make it so oracle became a growth stock once again, really rather extraordinary, igniting all of the nasdaq david, when you have something where you have the best in the business saying, you know what everything has changed everybody is going to bet -- everyone is going to say, is this business going to be augmented? they're going to take everything off until they figure out what should not have been brought up. intel. intel fared so badly on last night's call, we got a sell to hold intel is -- intel doesn't have what it takes. >> no. >> got nothing for intel >> there was a positive note from morgan stanley citing limited downside, given its underperformance already with that dividend cut out of the way. you know, jim, it's not as though we hadn't noticed nvidia's move up already on the hopes for a.i. and its central place in fueling a.i

you know, i guess it's just the fact that, again, jensen huang really leaned into it as opposed to saying, whoa, don't get ahead of yourself. >> right i mean, that was a surprise for all of us. colette kress, remember, called the bottom in gaming gaming has had a terrible correction that's fantastic for pcs she said that the datacenter spend is accelerating. you've got datacente accelerating you have the best business on pcs, the correction is over. and then, you have a.i., which is touching pretty much every industry and making it so that you're going to be much more efficient. that was one of the themes but one of the things that's amazing is that there is no other competitor to nvidia it's a really super computer it's so much faster than everybody else there isn't anybody who can catch up there's one company that is dominating a.i i can't recall one company dominating an industry that is $600 billion in total adjustable market now and there's no one who competes.

and by the way, when i asked them the question of, like, do you have enough of your card to equal demand the answer is basically, no, we can't equal demand we can't equal demand for many years. well, what company has that going for it >> right although two of your favorite names -- amd is up over 6% that may be because of the comments on gaming in particular from cfo kress >> lisa su, the cfo of amd, did not say that last quarter. she was worried about the inventory glut if the correction is over, amd can go up substantially. >> guys, switching subjects a bit. we mentioned alibaba at the very top of the show. it's worth coming back to. stocks coming off a little bit of where we opened here. of course, baba still a $260 billion market cap company, but if you look back at any fair length of time, it was a lot higher, as we all know nonetheless, it is a good

reflection of consumer sentiment in china the revenues were up, year over year increase of 2%. one would think, wow, 2%, that gets things going? that gives you a sense of what the market was expecting and where things have been they talk about continued improving operating efficiency but also in the press release, at least, talk about continued recovery and consumer sentiment and economic activity in china income was up sharply. they also are developing their own a.i. over in china, is baba, but as we discussed yesterday, it's unclear exactly what safeguards are going to come along with those opportunities that some of these chinese tech giants find, jim nonetheless, a positive report from baba. shares are up about 10% so far this year. >> it reminds me of what andy jassy was faced with when covid, the lockdowns ended. the stock was up 7% and that's when people started realizing, wait a second, maybe this is the

last good quarter and there will be a covid hangover next i agree with that sentiment and think that is not a stock that you want to own simply because they made the number with cost cut, and that's -- when we think of china, we want to make the numbers with revenue growth. this was not one of those quarters it's funny, because the group that i was most worried about going into today was oil, and look at oil. look at the -- how much money was made by pioneer, by qotera i think oil is an interesting place to focus on, because who would have thought the oil companies could do well with natural gas at 2 bucks rather incredible how these companies are run. >> it was pioneer just a couple weeks ago that said a 2 there are $2 price on nat gas would be troublesome. the spread between brent and texas, getting a lot narrower, shows that there is supply around the world it's pretty amazing. >> yeah. i mean, look, my travel trust owns pioneer we trimmed some because we did get nervous.

that nervousness was probably incorrect given the fact that i was shocked that pioneer has anywhere from 11 to $15 a barrel oil equipment cost and when you have oil at $79 or a little bit lower here, $75, look, if your basis is $15, you're going to crush it that's what pioneer did. they crushed it. cotera gave you a forecast that wasn't that good but told you that they're making a lot more money than people thought. i just think this is an overlooked group if you do think that natural gas has bottomed, which a lot of people did. a lot of our viewers were on cnbc.com yesterday hitting up etq, saying, david, i know you've been thinking about the bottom of natural gas at 2 bucks. it looks like it's here. >> thank you i have been, and i appreciate your informing me of that. >> not a problem >> because it is -- it kind of is something that's always in my thoughts, where natural gas is going to bottom.

>> yes >> something else i have been thinking about is lucid shares it wasn't that long ago, these shares hit a high, at least a recent high in part on speculation that perhaps the company would get a buyout from its largest shareholder, the saudi pif. that hasn't happened, but what has is earnings, and they weren't good they weren't good. >> no. >> they're going to double production, says "the wall street journal," but really it's the production outlook of 10 to 14,000 vehicles for 2023 that was meaningfully below many analyst expectations many were at as high as 27,000 for this year. the company did note, production's no longer a bottleneck, but they do have supply chain that remains a challenge, and it does appear they're going to have to do more marketing. increased brand awareness. and of course, that costs money. but overall, just weaker than expected results in terms of, again, reservations slipping to 28,000, production expectations for this year, you can see where

lucid is sports a pretty hefty market value of over $14 billion, just to point that out. shares are still up 25% this year but people perhaps finally kind of running from that rumor, and we kind of tried to pour some cold water on it at the time, jim, when it was -- the stock was running. >> you crushed that rumor. but david, if you look at the ebitda, losses, they'll be out of money in a year and a half. >> that's soon >> yeah. i mean, i don't know what they're going to do. i do think they have a great car. i've driven it but that -- talk about something that doesn't matter. it's irrelevant how great the car is at this point david, you have monitored this thing from its rise to its fall and it's a shame, because peter rawlinson is a visionary, but it's starting to feel more like a talk right now >> we focused on churchill

capital, the big spac deal, it's obviously below that price again at $8.53 that said, it's still a $14 billion market cap company with a very large and deep-pocketed majority shareholder. so, you know, we'll see if they need more money. >> they need to put money in that thing now, right now, or else i think we just have to say that it was a great run. they have to do that the car's just too good to just go away. carl, right now, phil lebeau yesterday had the great story about how in california, musk has number one and number two. there's a lot of room for a company that wants to come in, a beautiful car, and take share, but the production problems here are just now legion. i mean, they were there -- when i was out there with rawlinson, last year, the problems were terrible the problems aren't getting better it was two years ago the problems aren't getting better >> yeah. >> more reason to buy tesla. >> tesla is very hard to catch

up on. there's too many advantages and structural advantages, supply chain, logistics advantages. that's what's fed the bull argument on tesla for so long. jim, we haven't really had a chance to talk about apple and dexcom, but this piece about the glucose-monitoring project at apple, hundreds of engineers, one of the most secretive projects, according to bloomberg, that goes back to the jobs era what did you make of this story yesterday? >> look, i have kevin sayer on pretty much every quarter for dexcom, and dexcom is doing a device that will be as big as a nickel that you can implant that has got a perfect read, but what's so incredible is it's a perfect read on your iphone. i mean, it's -- you go, and you get the reading, and your iphone tells you how much -- what you need and what you don't. so, they're kind of reverse engineering that, putting it on your watch and do it on this you do cut out dexcom, but i would point out that dexcom has medicare backing

so does libra from abbott labs it's not going to be as easy as saying, you don't need that device implanted, we've got it covered. but if you can make it so you don't have an implanted device, that's going to be negative for dexcom, which is a fantastic company. >> it does remind me of -- remember when the watch came along, and we said, could they go into the medical device space? are they willing to start dealing with the fda it's still a question. >> it is, but they've certainly doubled down on health in general, right and helping you monitor it in all sorts of ways. >> david, you wear a watch you know there's a great deal of -- now, yesterday, two days ago, i was on the show, "mad money," i was going like this, and it indicated that i had had a fall >> oh. >> so, it's not exact. >> not good. i haven't worn a watch in years. i've let you guys do the apple watch for me i've just gotten rid of my watch, because why do you need a watch when you have your phone >> well, because your blood

pressure -- because it tells you you're walking now maybe -- >> i know i'm walking. if it comes to the day when i don't know i'm walking and i am walking, then really, i don't need it anyway >> it's got more of a theme than that >> all these skiers who keep falling and they're calling 9 11 from the mountain. >> i'm using a.i it turns out, i don't need david. did you get the button that says, you don't need david >> i'm going away now, but not until i talk about bed bath and -- no, it's not that >> you want to talk about soap i'm talking about life-saving. you want to talk about lotion. go go give me the lotion motion, david. >> it should be best buy, bed bath, and bodyworks. why am i mentioning the stock in we have an old f-fashioned proxy fight here third point, it's like a letter you would see from dan loeb a

while back, attacking a director's compensation, namely the chairman, a ms. nash they pronounced the version of including a shareholder representative on the board. and citing the compensation she received, that is nash, to be at least in an interim basis a chair, 18 million bucks. but he's going after them on a number of fronts capital allocation seems to be one of thhis focuses, and what e believes has just not been a good strategy when it comes to that in terms of buying back stock at highs and not buying it back at lows and a number of different decisions they have made there it's a good old-fashioned proxy fight. he's -- we don't know who, but he's got candidates for the board at this point, i believe, and he says his director candidates, well, he's going to go with them that said, he's already talked to the company and actually they say, at third point's request,

the board interviewed candidates and recommended a candidate, lucy brady, who's a senior executive at conagra she was appointed to the board, but this board or advisors chose not to get into a standstill with them. you do that, sign up a standstill be smart they didn't do that, so that put him in a position to still go after them, which he is doing, and says he wants for board representation for the company by the way, the company reported earnings this morning. the fourth quarter was strong. the guidance did not look particularly strong. the stock looked weak in the premarket but it is now up and up rather nicely, but again, kind of an old-fashioned letter from loeb here he's going after a few things, including capital allocation, but he does save his main attack for one of these key directors, who he says is simply overpaid, should not have been considered an independent director in any way with this outside pay package, a red flag for shareholders and signaling a

massive governance failure he says he fears the reason the board is reacting this way is because they and others have many reasons to close the curtain before shareholders can take a closer look at what transpired on their watch. jim, i don't know what you think about the stock on its fundamentals it's a $9.5 billion company, not to be in any way confused with bed bath & beyond. >> well, the numbers were very -- boy, i'll tell you, the forecast was just grim and it makes me wonder whether we're going to see people, once again, when you're -- soap is part of this whole category. you don't want soap -- no soap you want radio i mean, what i'm finding so much, david, is if you're going out, that's a winner look at the stock of american express. people aren't going to the mall and seriously buying these things you mentioned bed bath & beyond. i had don whit on, his company is the largest in the country, and they just basically said, they expected bankruptcy of bed

bath i don't want to do -- i don't want to be in these stores i don't want to go to dollar general. i don't want to go to bath & bodyworks. these are not what people are doing. carl, there is a real -- there's -- run from the mall >> you're still talking about an up 7%, you know, compounded annual growth rate, jim. >> they're making so much less >> $200 million in cost savings, by the way, as well, as part of the plan there >> well, good. i'd rather be in walmart >> all right >> whether it's walmart, home depot, tjx, bed bath today now, or bath & bodyworks, and dillard's, jim, the guidance out of retail this week has been fairly negative, and it does bring us to what target's going to say on tuesday. >> i know. i mean, i think target, at least the stock has been -- it's ready for a not-great number i know that the apparel part of walmart, they are not raving about it, but boy, they source

that thing all over. very inexpensive. look, i just think that retail represents the part of the economy that is not on fire. and we now have to start thinking more about the -- if you go back to the tolls -- toll call, the 50 million people who are millennials. they're not going. 60 million i mean, there's just some number of people that bought everything they needed to buy, and i thought that bath & bodyworks, the good thing about it, david, all the stuff you go through it and there's a lot of return customers, but i'm very concerned about that particular part of retail, which is the part that is -- you might have stocked up on during the pandemic, and you're not done. look at the retail, david, in amazon amazon >> i hear you. >> it's not good >> it's not wayfair. >> wayfair was killing it not that long ago. and by the way, you got -- you saw early on, when you started seeing weak numbers from williams sonoma, that people bought everything they needed for their home they want to go out.

antithetical, david, to the current zeitgeist post-covid >> they want to go out they don't want to buy soap. they don't want to buy pizza anymore or at least eat as much pizza as they want, and they're all going to have a.i. programming their lives for them pretty soon. that's the takeaway from this show >> they want to drink coffee with olive oil in it >> oh, that was yesterday's show, jim, not today >> oh, all right i tried. >> that doesn't sound good to me have you tried it yet? >> no, but i mixed my own version of olive oil into coffee, and i wouldn't advise it i didn't know how to do an emulsifier >> i wouldn't. but what do i know i have very limited tastes i'll leave it to a connoisseur like mr. carl here >> just splenda and milk that's all you need, guys. yields have come off the session highs. we did get to 3.96% on the ten-year bostic speaks in the 10:00 a.m. hour, and daly at 2:00

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numbers generally in the green, although we have some new headlines on sam bankman-fried a superseding indictment has been filed against him, adding charges tied this time to unlawful campaign donations during the last election cycle according to court documents, basically accused of using straw donors to mask the true origins of the funds and according to the documents, no candidates are alleged to have been involved in any wrongdoing we're going to watch that as well dow up 200 to start this thursday don't go away. alive as you are... don't settle for silver. harness the power of 7 moisturizers & 3 vitamins to smooth, heal, and moisturize your dry skin. gold bond. champion your skin. the hiring process used to be the death of me. but with upwork... with upwork the hiring process is fast and flexible. behold... all that talent! ♪ this is how we work now ♪

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all right. jim, remind us what's on "mad" tonight. >> jpmorgan and some others on scott's show scott will get the first chunk, jamie dimon. papa john's, what's wrong with pizza. pg&e, oh, my, this is a great turnaround story and i know that at this moment there's a lot of stock for sale from trusts they had to do, but i love the story. very, citing show. by the way, check out amazon's health care this morning i'm signing up right now it's amazing what they're going to do. >> really? >> yeah. just came out. i'm going for it after the show. >> all right jim, that's a good tip we'll check that out

look forward to this afternoon and tonight. >> thank you >> all right hurry back jim cramer, "mad money," 6:00 p.m. eastern time. as we got equities in the green ckrohe back of yields coming ba fm session highs. don't go anywhere.

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. good thursday morning. welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla and david faber. we are live for you at post nine of the new york stock exchange take a look. we're rallying today lower for the week by more than 1%, but a nice 0.8% gain for the s&p 500. technology in the lead thanks to nvidia, but energy, real estate, industrials, financials having a strong start to the morning. the nasdaq up 1% we're 30 minutes into the trading session. here are the big movers we are watching start with nvidia, why the nasdaq is leading soaring after beating estimates. the chipmaker's revenue outlook topping expectations the ceo jensen huang optimistic about a.i. alibaba, the company

smashing expectations on the top and bottom line and forecasts stronger demand ahead. the stock up 4%. keep an eye on domino's in the red deeply here after tough result there's ceo russell winer saying, quote, we experienced significant pressure on our u.s. delivery business in 2022 and focused our efforts on creating solutions. not something that investors want to hear so today it's really a deep dive on the consumer because we have a ton of earnings results and some economic data that help give us clues into the biggest question facing the u.s. economy, whether the consumer -- and if you look at a domino's, for instance, guidance hurt by macro economic uncertain tu, cited that, also americans apparently are picking up their pizzas, not getting delivery. >> no delivery. >> so i think it's really reflective of two things happening which is, nobody has any visibility into what's going to happen in the rest of the year and a lot of earnings users have to do with the fact that

guidance is tough. ebay said hard to give a full-year outlook. etsy said that guidance is a little soft because they are dealing with macro economic uncertainty there's that and consumer changes and it's hard to get a clear picture of what's happening. following walmart's comments, home depot, now bath & body works because of the presence of activist dan loeb but on the call sara said the first quarter assumes twaigs of softer demand trends and elevated inflation and wage pressures. >> they guided flat to negative and street was expecting 4% revenue. >> guidance was below but the stock is responding positively, perhaps in part because of the presence of mr. loeb and people are looking through that because they are committed to 200 million in cost cutting. it is the bigger question you raise, we're not getting it resolved and we can go to the

dollar stores if you want, dollar general coming in with ugly numbers, the stock down 4%. >> they blame the winter storm because apparently november comps looked good, january comps looked good, december not so much that influence would be traffic and inventory for dollar general. there will be questions about the low-end consumer there gaps was below expectations and usually they're a winner during recession and when the low-income consumer struggles. but it's not easy to pick winners and losers right now. >> it's true planet fitness doing pretty well on their quarter they were up 5% at the open with the beat comps up 9, looking for 7.8. they pointed out 6% of americans above the age of 15 are planet fitness members. no idea how much of them actually go. >> they don't go they pay. >> and because they never raise prices 10 bucks and they -- we have talked to the ceo about this

they are immune to inflation or just eat it because they don't raise their price. >> it is the model by the way, we're looking for catalysts for more retail sales and morgan stanley with a nice chart now that average tax refund size for the year is going to track lower than last year, although more or less in line with previous years we have gotten used to that springtime bump as you get a refund. >> new data to chew on a revugs to gdp which was lower i think which helps the market because if it was higher, just another hot data release there we have 2.7% growth instead of 2.9% for the fourth quarter but the biggest revision lower came in consumer spending i don't know if you dig in that report, a downward revision to growth of 1.4 from 2.1 on consumer spending. it's a healthy consumers out there spending but fourth quarter didn't look as strong as initially forecast on the flip side, how about the jobless claims, down to 192 from

195. the average prepandemic level was around 220s. we continue to look fort layoffs and the market continues to expect softness in jobs and it's not happening. >> people are spending money to your point they're taking trips they're spending it on experiences, aren't they? >> they are. if you look at the services, hotels and travel. one place, though, not as much on restaurants they're eating at home even though they're spending and going out, eating at home continues to be big. we talked to pepsi's ceo yesterday on "squawk on the street" and part of this has to do with the fact that it's hard to tell what's happening with spending because the habits are changing i think we have a sound bite of what he said when i asked how the consumer is doing. >> we see consumer adjusting in some cases, but our categories continue to be resilient now, there are some adjustments consumers are making we see that consumers are changing where to buy. there is an adjustment on where

to buy there's adjustments on how much they spend away from home versus at home. we're seeing more meals happening at home. and if they were going out five times a week, now they're going out two times a week and the other meals are being done at home we're seeing how consumers are social using they used to be -- go outside of the house for socializing. now they're entertaining at home they're inviting friends over. all those trends are adjustments to i think the possible income reality of our consumers >> the bottom line, david, it's not as simple as consumers are going out and all the services are working. he cited three examples of how we're socializing and eating at home more, even though the value is eating out. we're seeing the price of food, they say in the january cpi and last 14 months sore, has been much higher for grocery prices than for food at restaurants and yet, people continue to buy

because the demand holds up and the pricing increases are very strong. >> i don't know. january retail sales were up 6 bars and restaurants up 25. >> yeah. they got a good january spurt. we'll see if they continue tell it to domino's and papa john's, the stocks getting hurt hard this hour sales aren't coming in as well as expectations. those restaurants have labor pressures to deal with, they're still dealing with the cost side of things, and consumer habits change. >> restaurants are really expensive. that's all i would say maybe food prices -- >> going to the grocery store. >> that part i don't try to do. >> you don't >> no. >> you do the dishes >> i do the dishes i do not go to the grocery store. >> it's crazy high. >> unless there is an emergency and we don't have mellamars. >> we're going to stream this out for weeks. >> an ongoing theme now that sara is here. >> he yeah we're -- >> our connection to all things packaged goods let's get to our market

commentator mark santoli as we got relief from the early morning yield picture. >> yeah. i mean, we got our first 5% pullback on the s&p and so far that was bought right now. you mentioned the themes outside the nasdaq with nvidia you have some of the consumer resilience and it's been a continuation of a trend. if you look at the consumer discretionary sector equal weighted this goes back 8 months since the market peak discretionary has lagged things like consumer staples, the other line here. all the weakness in the first half of last year on a relative basis. this took off coming into the year out of the october low. consumer discretionary a lot of that, you know, to hit on the points you've made has been in things like home builders, lodging, hotels. they've all been relative lu strong the chain stores have not quite kept up to the overall sector, but have outperformed the market since that period of time. now, dollar store versus the e-commerce discretionary piece

is vibl in dollar general over etsy over two years. you had the switch off, if you go back to 2020, we remember etsy being a moonshot, dollar stores were left out in the cold obviously, massive relative performance change, but maybe a little bit of a rethink going on especially on today's numbers when you have etsy popping a little bit and dollar general on the weaker side. i think it's a noisy moment to figure out the condition of the consumer there's an ability to continue the spending pace but maybe less of the willingness i would point out, sara talked about the revision to gdp in the fourth quarter, the revision lower in real growth, mostly came because inflation was revised higher nominal growth still strong. the nominal level of consumer spending at a brisk pace it was just that adjustments on the pce for the fourth quarter was higher and, therefore, you still have a lot of dollars running through the consumer economy just maybe a lot of it is prices as opposed to real

demand we're going to get the updated pce number, of course, tomorrow before the open. >> mike, appreciate that busy week continues. as we mentioned last hour, the superseding indictment filed against the former head of ftx, sam bankman-fried, adding charges tied to unlawful campaign donations eamon javers has more details. good morning. >> good morning. these new charges now really ratchet up the level of seriousness for sam bankman-fried and he could be facing additional time if the government is able to prove its case in the slew of new charges added to the ftx case here i want to direct your attention to the political contribution issues here's what the new indictment says about the political contributions and the scale of this effort. they're saying sam bankman-fried, defendant, and his co-conspirators made over 300 political contributions totaling tens of millions of dollars that were unlawful because they were made in the name of a straw donor or paid for with corporate funds what the indictment is saying here there was a massive effort

to influence the political system here in washington by sam bankman-fried by pumping money into the system that he didn't want people to know he was pumping into the system. in the indictment, they say that defendant and his co-conspirators recorded outgoing wire transfers from alameda the hedge fund to individual bank accounts for purposes of making contributions as loans or expenses that's against federal election rules. and to underscore the sort of cynicism of the alleged conspiracy here, one of the details in the indictment stands out to me, which is that defendant and others, were trying to recruit a straw person who's identified as co-conspirator 1 to contribute money on behalf of sam bankman-fried, at least a million dollars to a political action committee that was supporting a candidate running for united states congressional seat and appeared to be affiliated with pro lbgtq issues selecting this person as a person to make the contribution

in sam bankman-fried's behalf. a political consultant working for bankman-fried asked ccu, the co-conspirator 1, to make the contribution and said in general, you, being the center left face of our spending, will mean you giving a lot of woke stuff for transactional purposes the suggestion here thauz these were transactional patients to politicians to curry favor with those politicians disguised as sort of woke pro lbgt contributions on the merits of the issue. but in the reality, a transaction with that politician so there's a lot more names to come out in terms of who these people were, what exactly was happening here, who the politicians were, but the government now alleging a serious effort here by sam bankman-fried and his codefendants to influence the political system with a lot of secret money and we'll bring you more as soon as we can get it in terms of who these people might have been and any response from sam bankman-fried's team.

>> so, this adds up to a total of how many charges? how does this extend what he's facing >> well, it looks like what we're dealing with is 11 new charges on wire fraud to conspiracy to commit bank fraud, you could be looking at years of potential new time involved in this if the government is able to prove this case an indictment, just an allegation, they have to prove this in a court of law and we'll hear from sam bankman-fried's side has to say about this this is a serious ratcheting up of the scale of sort of legal jeopardy that sam bankman-fried is facing. >> yeah. as if it weren't already thank you very much. keep us posted eman javers. as we head to break, our road map for the rick santelli of the hour the ntsb has released its first report on what caused the norfolk southern derailment in east palestine, ohio we have the new report for you

some $600 billion wiped off alibaba's market cap since it saw its highs in 2020. could today's earnings be signs of a turnaround? >> nvidia betting big on a.i. but when will it pay off more on those numbers with the analysts behind one ofhe ght rgs thiestaeton the street after the break.

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let's get back into the move for nvidia the eighth weekly gain, the first time it's ever had that

kind of a track record our next guest believes nvidia's long-term prospects are some of the best in the chip industry giving the increase in generational a.i. models joining us is piper sandler analyst kumar. good to have you let's start off, what surprised you from the call and beyond the earnings were you surprised by the commentary as well >> yes, i was. thank you for having us on the show it was what i would call as a perfect guide as far as the quarter was concerned. they gave out a gaming bottom, one quarter ahead of the preview. the data center business is bottoming, business something that investors care about deeply most importantly the data center business is expected to accelerate through the year. we're not just calling for boom but also calling for good prospects from the data center business through the year. if you put this in perspective there are really two big cloud plays in the semi space.

one of the them is in tnvidia ad one is amd both have strong prospects through the year, strong acceleration through the rest of the year that coupled with the tam opportunity with chatgpt surprised investors. i think that's causing the huge move in the stock. >> yeah. well let me get your take on their extended discussion really of the opportunity when it comes to a.i. talking about nvidia dgx and a.i. super computer and the blueprint for a.i. factories built around the world this would seem to be a near-term opportunity, perhaps, some investors had anticipated would you agree? >> i would absolutely agree. look, if i said to you nine months ago what is chatgpt, you and i may not have known what it was. but the reality is, chatgpt has tripled its user base and shown

this light on to the capability of what jen raytive and transformer model cans do. the reality is that something like a generative model like chatgpt can only be done using nvidia chips at this time. our understanding there are roughly 12,000 high-end nvidia gdp users of the azure data center, $60 million investment on the hardware side alone there are 400 odd startups trying to generate models from texts to music, videos, pittings, et cetera, and all that can only be fueled at this time by nvidia we believe that moat is not just the hardware angle but the programming language that nvidia gives away for free called cuda. cuda gives you the language for free and pretrained models to companies that they can tweak and that significantly cuts the

time to market for some of the customers. >> so we see what's happening with the stock today it's up almost 4%. i think the question, if investors are looking at this, and you're characterizing this as a new total addressable market that is a.i. for nvidia, how does that play into what this stock should be worth >> so the stock is really a -- if you think about the stock, take a step back, so this is a company that is capable of growing 25 to 30% or even 35% organically. the crypto piece, which was a little bit of a black mark on the company the last couple years has flushed out to zero. the base business organic business can grow 25 to 35% something like that, which is in the software zone. the company's cash flow positive, makes money, has leverage and then outside of the

hardware angle they're promoting three models, a service call nemo and bionemo they're going to introduce shortly on hyper scale systems. that's altogether a couple hundred millions now but could be a couple billion in the next three to four years. you take that brand new opportunity of the hardware generative opportunity couple with the high margin, high growth software opportunity and you really have a blockbuster stock. >> all right blockbuster today for sure up about 14%. harsh, thank you. >> thank you meantime the ntsb today releasing its first report on that norfolk southern derailment lastn that after a very short break.

we're coordinating with the ohio epa on a long-term repleadation plan. we've reimbursed or committed $6.5 billion to this community the national transportation safety board just issuing the first report on what caused the norfolk southern derailment in east palestine, ohio, this month. morgan brennan joins us with the latest what was in that report? >> that's right. the national transportation safety board confirming in this

report that this accident seems to have been caused by the failure of an overheated wheel bearing, the rail network, the train tracks that had hot bearing detectors as they're called saw the train pass three of them with temperatures rising at the third hot box detector which was just east of east palestine. the temperature of that wheel was hot enough for that hot box to transmit what's called a, quote, critical audible alarm message instructing the crew to stop the train to expect that hot axle it wasn't until the third detector that the temperature was hot enough to be an emergency and for that stop to be initiated which is what happened the ntsb also saying at the time of the derailment that train was traveling shy of the authorized maximum speed 50 miles per hour. no comment from norfolk southern but in my interview with alan shaw this week he said the railroad was awaiting the results as the lawmakers and transportation secretary pete

buttigieg -- have a listen >> we invest over a billion in our safety program in the form of maintenance and in the form of equipment and technology. there's more to be done, you know, as you can imagine, since this occurred. every single day i've asked myself, what could we have done better what could we have done to prevent this >> and we are still getting answers to that. the ntsb says it's still investigating. many factors tied to this disastrous derailment including accident response, the venting and burning of toxic vinyl chloride, railcar design, maintenance procedures, use of those detectors, those hot boxes and railcar inspection practices. it's just worth noting, guys, that those hot boxes are not federally regulated. the railroads put them in. it's not mandatory it's not mandatory to oversee them the railroads put them in to be able to try and prevent

mechanical malfunctions and other issues from happening derailments such as this from happening on their networks. >> morgan, the hot box worked and sent the signals that says you should stop the train. >> it would appear so. >> yes. >> a function of trying to stop the train that forced the derailment as a result of -- >> this is a four-page report that's preliminary there's more questions than answers. but given how much attention this has been getting, it's perhaps not surprising regulators have put at least this much information out so far. but it would seem that -- i don't want to speculate. i have to go through it more it would seem that alert happened east of east palestine and that the train conductor, engineer responded and set into motion a process of slowing and then braking for that train and once that was done, noticed

there was smoke billowing and seemed to have been signs of a derailment i'm still going through it but that seems to be the preliminary information now we've gotten from the ntsb. >> okay. we'll, obviously, be checking in with you and you'll have more as well morgan, thank you. coming up, our earnings estimates still too high we will veha charles schwab's l lieu ann sanders she says yeah. find out why after the break let's get started. bill, where's your mask? i really tried sleeping with it, everybody. but i'm done struggling. now i sleep with inspire. inspire? inspire is a sleep apnea treatment that works inside my body with just the click of this button. a button? no mask?

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i'm bertha soocoombs former mastercard ceo aj benga is president biden's nominee to run the world bank the announcement coming 30 minutes ago. a statement biden said banga is equipped for the job because he spent decades to developing

economies. he will succeed david malpass who plans to step down in june. israel is hitting the gaza strip with air strikes today after rockets were fired from the area that follows yesterday's deadly fighting in the west bank sparked by an israeli raid targeting three militants. ahead of a meeting of g-20 finance ministers in india, treasury secretary janet yellen is warning china there will be consequences if it helps russia e-quaid evade american sancts. we are about an hour into the trading session. better tone today than we've seen earlier this week the s&p lost a little bit of steam in the last few moments but up half a percent. technology the lead sector you've got energy up there as well health care, financials, industrials, materials and staples all positive at the moment our next guest says earnings downgrades arrived too late and remain too optimistic for the

rest of the year charles schwab investment strategist luzanne sanders joins us we were talking about how a lot of disappointment reflected in the stocks has to do with the fact that guidance is murky when it comes to the consumer so is your point that more softness in the economy is not factored in? >> one of the factors that is most closely correlated to earnings in this case in an inverse way is the 10-year yield and it's not just the recent tick back up in the year of close to 4% now, but given the lag effect, the prior influence of rising interest rates, i don't think it has been fully factored in yet. you still have 2023 calendar year above 2022 calendar year and i think a bias towards weakness in the first half of this year, the path of least

resistance for earnings system are lower. but to your point, sara, this is a uniquely murky period of time, so there's also the problem of guidance, either still being absent dating back to the 2020 period or companies saying there's open so much we can do to provide proper guidance and at this point analysts have erred on the side of keeping us higher i think the next move down is probably in that direction. >> so you're negative on the market sounds like what was the last few weeks? what was the 2023? is it just another - >> i'm not necessarily negative on the market. you know, if you go back to the m mid-october lows, there was intriguing positive divergence happening at that time we spoke about it when we saw the retest and move down through the mid-june lows by the s&p under the surface you were not

seeing the same kind of deterioration in breadth you started to see that positive divergence we subsequently had a couple thrusts. the rally for the good part of the start of this year, my concern about that was, it's bias down the quality spectrum, up high beta, in areas that were, in essence a bet on a resurgence in economic growth, which i don't anticipate, but i think you can still lean into higher quality segments of the market while sort of fading that high beta, high little cyclical, lower quality speculation driven segments of the market i think there's a way to use a factor based approach to kind of lean into what makes sense in this environment and push against the lower quality trade. >> you would be rotating now i shouldn't have said bearish, necessarily. you would be rotating into higher quality more value type stocks

>> well, so you also have to keep in mind what defines growth and what defines value to use the s&p rebalancing as an example of that, the s&p rebalanced its growth and value indexes on december 19th on december 18th, the day before the rebalance, all eight of the mega cap eight, the f.a.a.n.g. plus names, were in the s&p pure growth index, there was no overlap, they didn't exist in their value indexes, and they can have a bit of an overlap as of december 19th when s&p did the rebalancing only one of the eight remained in pure growth. only apple now the top eight names in pure growth only one is tech, two of them are energy, five is health care so i still think you want to look for companies that have decent growth prospects, positive earnings for business, positive earnings surprise, but don't put blinders on in terms of where you look for those growth factors there are times you can find it in areas that are perception

might think of as value, but the reality is, the factors are characteristics of growth and value can often mean something very different than preconceived notions of or index constituents of growth and value. >> i'm wondering if you're getting client questions about a.i. because we're in this period where arguably if we don't go back to a zero cost to capital world, the picture for technology as a component of the market changes, but then if we introduce this whole new growth story, how much of that gets offset are you thinking about that yet? >> we are starting to get questions about it some are micro level questions in terms of, you know, who are the biggest beneficiaries and i don't go down to the individual stock level, but some of the broader questions relate to could this be part of the answer to what appears to be a pretty weak productivity story embedded in a lot of the better labor

market numbers is actually weaker productivity numbers and could that represent a solution to what could be a secular period of weaker productivity given the dynamics of the inflation backdrop and the labor market i think -- i always think innovations are interesting. some of what we're seeing occur in these chats, some of what the reporters have dug into is a little bit disconcerting, so maybe some kinks literally and figuratively to be worked out. i always think these are intriguing and it could be one way to boost some of this productivity which is pretty anemic at this point in the cyclical. >> g cycle. >> great to get your thoughts.

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alibaba is having a strong day after the strong results eunice joins us from beijing with more on the quarter and what it might signal about the

reopening in china and the consumer hi, eunice >> reporter: hey, carl, alibaba beat its system for the third quarter on the revenue side. it was up by 2% on the net income side. up by 69%. the numbers, though, also reflected the difficulties in the quarter. the business conditions under zero covid, for example, commerce in china, the revenues down by 1% from the last year and also customer management revenue or cmr, this is a way, very key metric where you could track the payments of the vendors. it also is making up about a bulk of the total revenue. that was down by 9%. but, of course, this is the end of february so a lot has changed. i.e. zero covid has lifted because of that, the ceo sounded optimistic he said that in the past two weeks, a lot of the vendors said they're hoping for a bumper year, and he sees progress and, in fact, progress is going to be

the key theme for alibaba this year there was, though, a bit of a cautious tone in his voice where he said he's still optimistic but they're monitoring the situation. a lot of that is because they're concerned, there's quite a bit of concern actually, about the health of the chinese consumer on the investor call a lot of questions were focused on whether or not alibaba was going to unveil any subsidies. a lot of speculation one of its rivals j.d. is going to institute a $1.5 billion subsidy plan questions as to whether or not alibaba was going to do the same he was adamant he didn't think subsidies were the way to go and they were going to focus on technology and in technology, that hot topic, of course, generative a.i. came up and alibaba's own plans for a chat bot. he was a little bit circumspect about it, confirming they are

working on some chat bot, but he said that -- he wouldn't give detail and mainly was focusing on how alibaba could help with the infrastructure to help other companies create chat bots and other generative a.i. and also that they're mainly using this type of technology internally testing it and see it for applications within the company. guys >> eunice, there's been so much bullishness on global wall street about the china reopening, especially the chinese consumer it felt more like a light switch turning on for the u.s what is your sense of the pace of reopening there, and i'm just curious, do you still have to wear masks everywhere it public? >> well, you don't have to wear it everywhere in public. it's strongly advised and in the public which in a chinese context is, you know, when they say strongly advised, a lot of people take that to heart. in the subways, for example, and

some other indoor spaces you have to wear a mask wherever you go but for the most part people are starting to feel better. in fact, we had some commentary from the chinese health authorities who said that covid pandemic is basically over, so people are starting to feel better going out more and more as the ceo of alibaba had said, and the rest of the management, they're seeing much more progress just in the past two weeks, so that is boding well for the rest of the year though still worried about that big loss of income that consumers have felt because of the past three years of the zero covid. >> eunice un, thank you very much coming up next hour, wells fargo lays off hundreds of mortgage bankers as they continue their retreat from the battered housing market. more on what that means for the other big banks with a reporter who broke that story for us on cnbc in just over 15 minutes stay with us here on "squawk on the street." dow is up 80 points. we'll be right back.

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slate. joining us to discuss today, cnbc exclusive, with imax ceo rich gillfan great to see you again stocks close to a 10-month high here and you're certainly growing faster than the overall box office i assume that's about taking share in an era where people if they go to the movies, they want to see it movies, they want to see it big. >> we reported our earnings as, you know, last night, and our market share in north america was 4.8% on 1.1% of the screens and 3.3% globally, way less than 1% of the screens. so, yeah, we're taking market share. as people go back to the movies, they want to see them in the best way possible and that's imax on a global basis as you know, we're coming off avatar where we did 11% of the box office or over $250 million, less than 1% of the screens. so, it's a good time to be in the imax business. >> yeah. how much of that -- avatar is a

great example. it was not just the size of the screen or an imax camera, but the 3d effect that made the difference >> yeah, i think it was all of it i think it's the brand, you know, people around the world -- in china we did 21% of the box office for avatar for the whole country on 1% of the screens we're a technology company you know, we work with filmmakers to create the best images possible and the audiences know that. when there's an event, spectacle film, audiences want to see it on imax across the globe that's manifested in the earnings call, not just from consumers, from exhibitors, from studios, from film makers, pretty much all of our constituents >> we were just talking to a reporter about -- eunice yoon in beijing about the reopening in china. you mentioned it for avatar.

broadly speaking, how does the recovery of the box office there meet your expectations how's it going >> well, in general, in the world, when you look at our financial results for 2022, outside of china, the world was open and we were pretty much equivalent to our 2019 box office except for china. i have to tell you, sara, we were optimistic about china, but i saw eunice's piece, as she was saying how quickly it's opened it's been much more like a light switch you know, you look back to early december there was still quarantines, people couldn't leave their homes, the country was pretty much shut down and then you go to chinese new year where at imax we budgeted $42 million for chinese new year and we did $62 million you know, for "ant-man" which just came out this weekend, we did over 20% of the chinese box

office so, the turn-around has been remarkable there and for imax we do both hollywood movies and local language movies. we've seen the traction just not on the avatar side, but there was a local language movie called "wandering earth 2" which became our biggest local language movie in our history. it's just been remarkable how quickly it's happened. >> rich, there's this now famous clip of steven spielberg giving tom cruise a hug and saying, you saved theatrical distribution of pictures you kind of agree with that with "maverick" >> i think it's more than one movie, but when i see tom cruise, i give him a hug, too. the guy really is big for global box office yeah, i mean, "maverick" did $1.5 billion i had seen it a year and a half before when it was supposed to come out it's a wonderful movie

by the way, i'll put in a plug and hope it wins best picture at the oscars but i do think it reminded people, and it particularly reminded older people what they missed about the movies, the communal experience, being with your friends, cheering at the end of the movie you know, i think he was certainly one of the factors >> we've got a better slate coming up. we'll be looking forward to guardians 3 and little mermaid looking forward to having you back, rich see you soon. >> thanks, carl. see you at the movies. still ahead, more on a key tailwind for consumer demand and what taxes have to do with it. meantime, markets have gone red. dow's down six points. we have fallen back again above 4k on s&p. she always had your back... like the time she spotted the neighbor kid,

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that has put tens of billions of dollars of extra spending in consumer pockets of those 43 states, 21 have cut their income tax rate. iowa cutting its biggest from 8.5% to 3.9% georgia going from 5.75% to 4.99%. a dozen states are considering tax cuts this year connecticut governor ned lamont is pushing the biggest ever tax cut, $600 million, cutting rates for those making less than $100,000 mississippi and arkansas considering plans to eliminate their income tax all together. the federal reserve saying in its minutes released just yesterday, quote, participants noted that some states could return part of their sizeable budget surpluses to households through tax cuts or rebates, which would provide support to consumption. david, of course, the big question is what happens if this economy slows? then we have a decline in tax revenue. it's already happening in california california, which had sent

checks of $1,000 each to people last year, is now projecting a deaf deficit of over $30 billion. new york and california the exceptions here. everywhere else is cutting, giving back money to taxpayers >> yeah, something we might want to consider in new york, given the incredible size of our state budget, not to mention the city. in california, they had a huge budget surplus last year, didn't they robert >> they had a huge budget surplus of over $10 billion. it was projected to go over $20 billion. then they were hit with the capital gains decline. 2021 was all that tech wealth. 2022 it disappeared. probably going to be worse this year so, the stock market has really hit california new york, not as bad of course, the rest of the states are boosted by all this employment growth and strong labor market >> robert, thank you robert frank. speaking of stocks going down and where you won't get a

capital gain, lucid down 18% you can see the stock very weak. del deliveries, production coming in well under what analysts estimated. jim cramer looking at how much cash they have left and how long it will last them. let's get over to carl and sara on the new york stock exchange floor. >> good thursday morning i'm carl quintanilla with sara eisen live on the floor of the new york stock exchange. jpmorgan's chief economist, we'll get his first take on gdp and jobless claims and the questions many investors are asking, where have all the doves gone we also have china's beige book ceo, leland miller on this year's head fake for china's growth that's what he's calling it, even though alibaba shares are up on blowout results. ceo mark fields, tough week for evs,