bank should be prepared to keep raising rates. it is friday, may 12th, 2023 and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we're live from nasdaq market site in times square i'm melissa lee along with kerjoe kernen and andrew and becky are off today. the s&p is looking to at 16. the dow up 140 points. the nasdaq is up 33. the nasdaq 100, joe, we are at levels since we have not seen since last year. >> bull market >> bull market >> it is >> for mega cap stocks

>> apple is up 20% year to date. >> we are in rising interest rate environment it is not supposed to happen >> thanks to the regional bank crisis >> that hurt the markets yesterday. treasury yields. 3.9%. >> bowman or bowman? >> bowman. >> how many are there? there are a lot. they keep changing we need to know about every waking thought why? why is the fed such a big part of our -- there is the rub there's the rub. i care about what this person whose name i can't pronounce the fed should not be so linked with everything that we're doing. this is more important let's talk about the debt ceiling whisperer. president biden and congressional leaders postpone

the follow-up meeting scheduled today and moved to monday. joining us is jake sherman he is an cnbc political contributor. do you have a preference you love all your children the same >> i'm a company man i'm happy with whatever. >> i'm fixated on that we like poaching people. we like stealing people when they're really good. that is not a great idea there's enough of you to go around. >> there is. >> confirm this for me the tone of the delay seemed better than when it was on in that -- for the first time, it doesn't mean anything negative all we heard was negative. it doesn't mean anything negative suddenly, instead of hearing everything from the biden administration that we won't do anything, they are saying here is what we won't do which opens up the possibility there are

other things they might do. >> a few thoughts here number one, i talked to kevin mccarthy late yesterday about the delay. his view was actually don't make anything of it we're not ready to kick this up yet. here's where we are. on wednesday this week, the staff met and started talking about the policy options they could include in some sort of deal at some point it was a cordial conversation. these are aides that are professionals and they were going through a bunch of policies thursday, same thing there are a lot of policies they need to go through a lot of questions and now we're at the point where they discuss who crafts proposals they have to give a menu of policy options to the principles, mccarthy, schumer, jefferys and president biden i think they weren't ready one of the leaders has a funeral today. they couldn't make it to the

white house meeting. here is the problem, joe mccarthy told me earlier this week that he needs a deal by monday he's not going to have a deal in principle by monday it will not happen they need at least a week in the senate and perhaps a week in the house to get this through. we are pushing against the deadline a couple of thoughts here. a couple of people said if we were at this point in february, we would be bullish on a deal. we're at this point 20 days out which makes us less bullish about a deal again, they are talking. there is some good here. >> number one, when the main players get in front of the camera, you know, terrible things happen. i'm glad these are high level reasonable staff they understand. the high level guys know what we

need to do here, and gals here i think all along, the most st strident democrats know all along and the minute the cameras stop, they said we have to negotiate. they cop to that, jake that is something that is going to happen. i thought it was interesting that they have something sacrosanct they will not talk about. his favorite thing -- inflation reduction act. they are calling this mccarthy's debt deal. the default on america act that is what some in the white house called it. that is almost as good as inflation reduction act for not describing it at all. >> two things i don't think they will touch i don't think they will repeal the i.r.a. it is going to be difficult for mccarthy to get work

requirements in any way, shape or form. that is a step too far for democrats. some in some states and congress voted for it in the past i do think the sweet spot for a deal is rescinding covid money, uns unspent covid money, and spending caps and spending reductions that is the sweet spot how they craft that to give democrats the cover to say they voted for a clean debt ceiling is not going to be impossible. it will be hard, but not impossible again, time is the enemy here. you are right. most democrats privately concede that a clean debt ceiling will not pass you gave out my twitter account last time i was on and i got a lot of nice comments from folks. >> followers >> yeah. >> they left me alone. i don't use my real name people say why don't you have a blue check mark?

plausible deniability. that may not be me i'm not saying it isn't. i'm not saying it's not. >> the difference? i don't think a clean debt ceiling would pass the congress based on covering this a long time i don't think it will happen on the same token, republicans only do this when democrats are in the white house i want to be clear they are not ideologically consistent here. when trump was in the white house, they raised spending deal and clean debt ceiling they only do this when the democrat is in the white house that is the reality. they are not ideologically consistent here. democrats privately recognize and concede the fact that behind the scenes they need to get a deal that is the only way out. >> right we can always argue. i think if you cut corporate tax rates and call that, you know,

blowing out of the deficit i would rather cut corporate tax rates rather than tilting at windmills. there are reasons why the republicans want to stop -- i know i'll get hate mail on this. there are reasons you want to put a democrat on republican spending republicans are bad, too a difference of growing government the size of the entitlement state in europe and trying to keep taxes low i'm still a reagan guy. >> i want you to be whoever you want to be, joe. there is one other policy that i think there is unity on which is permitting reform for energy projects and clean energy and oil as gas. >> for carbon capture. i don't know windmills. i just mentioned you need permitting to do all of the green stuff.

can't you sell it that way we need natural gas and fossil fuels. it is good for both sides. >> democrats tell me the clean energy folks are actually for permitting reform. this would be a big win for mccarthy it is not hard to see. >> before we go, i know we could pay -- we could not default on our debt until june 14th it would be bad. we have to worry about all those things we could add on another two weeks if we had to without defaulting on the debt i don't know if it is really a hard break on june 1st >> it is not a hard break yet. treasury is expected to update we get another update today on the congressional side on the date i read a lot of analysts about this i think the general theory is june 1st is the earliest could be some time between june

1st and june 15th. if you are able to scrap by until june 15th, that is another influx of tax money coming in. you might be able to get away until july this is a moving target. i think you are absolutely right. june 1st ast this point is not the hard date. >> we got to go. here is my horoscope today some friends and colleagues are of the opinion disaster lurks around the next corner you have no intention of joining in their apocalyptic way of thinking see what i mean? see how things in the universe you don't think this is a simulation every day that was very telling, was it not? >> extremely >> jake, thank you >> thank you >> thanks for coming on again. i hope you are not getting

calls. what was your twitter handle >> just my name. jake sherman >> you have a blue check mark? >> i do. >> it is really him. it is really him see you later. >> i can't escape it i have a picture, too. all those things >> thanks. coming up, drama at twitter. elon musk says he hired a ceo and she will start in six next -- six weeks we will tell you what we know. and shares of pacwest is up slightly in trading after it fell last night. and other regional bank stocks under pressure yesterday. looking higher today with key corp looking to post a gain. we'll be right back.

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the new york times reporting that linda yaccarino is in talks to be the new ceo of twitter nbc universal is the parent company of cnbc. elon musk saying she will start

in six weeks let's bring in gene munster for more gene, it was interesting that twitter stock yesterday got a pop on this. assumption that elon will have more time to spend on tesla. i wonder if that is the right verdict here >> it is fractionally the right verdict. this is good news for elon musk personally a positive for tesla and the reason why is clear that his role as ceo is moving in a different direction, but he will have a role at twitter as a product p peerson, there w be time allocated for that his passions don't end at tesla. we have spacex and neuro link and the boring company there is, enter from stage right, the a.i. company. this is the piece why investors

should only view this as a tesla fractional positive. my impression is elon musk wants to pursue a.i. he has been talking about this for the last decade and last month, he has been hinting at a chatgpt competitor this is a positive for tesla shareholders there is bigger news on the tesla front in the next two years, of course the company hinting of a new ceo there. any positives related to this development need to be taken into context of what will happen in the next one or two years with the tesla ceo role. >> in the context of your theory he will spend more time on a.i. and a.i. projects, should meta or microsoft or alphabet be concerned of a competitor coming

down the pike? >> at this point probably not concerned. as soon as he formulates his team and, you know, elon talks about a lot of things. i think he will pursue this. once a product is formulated, there should be concern. you know, it is debatable how much recruiting power he has he has incredible power to bring in great talent. with a.i., it is a small group of people making massive advancements everything we have seen or most of what we have seen across the board from a.i. has been driven by three companies open a.i plug-ins for other companies to power experiences. so, you have this land grab for talent elon is capable. melissa, other big companies should be concerned about musk and potential of creating disruption in a.i. depending on the team he brings together. that is still unclear.

it is worth a footnote on this which elon has been all over the board on a.i he talked about this being the end of humanity. he ended the investor event in in march with a somber assessment of a.i. he said that development of it needs to be slowed down. on the flip side, he wants the a.i. company and separately, a.i. is a big piece of autonomy. that is the value proposition for shareholders for tesla is to build out. >> for something we havehave led from musk's ownership of twitter and ability to juggle time and projects or inability. is it clear it is okay for tesla to lose its ceo and transition away, but maybe three years ago, we would have thought it would be a selloff in tesla stocks if

he announced he was stepping down maybe not the case any more? >> i agree there would be a selloff i think it would have been a run for the exits three years ago when the company was on pins and needles. it is in a different place with cash position today. it has shown it can operate without it of i think the cfo doesn't get as much credit for keeping things moving as well as they have been moving and they have a good road map. what is important to the conversation which we will have in a year or two which is musk leaving ceo of tesla is what his new role would be. it will be a product role. as long he is involved, investors will be happy. >> is linda yaccarino the person you thought he would go to do you think she is the right person given revenue declined 50% since

october because of the decline in advertising revenue is she the right person? >> i think she is. i think they have some shared views with free speech from that perspective, she checks an important box. she comes from big media that is twitter's business she adds a little bit of stabilizing factor and taking some of the rough edge she has been someone who has the velvet hammer. musk is the hammer it is a tough role to fill i think the little i know about h her, it makes sense. >> gene, thank you great to see you gene munster, deepwater management. >> it would be a big loss p of the -- big loss.

i know her personally. twitter would be amazing coming up, meta platforms rolling out new tools for advertisers powered by a.i and congress member french hill will weigh in on the debt ceiling debate and what it means for the odds of fat.deul he used to do side jobs installing windows, charging something like a hundred bucks a window when other guys were charging four to five-hundred bucks. he just didn't wanna do that. he was proud of the price he was charging. ♪♪ my dad instilled in me, always put the people before the money. be proud of offering a good product at a fair price. i think he'd be extremely proud of me, yeah. ♪♪

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meta revealing new tools and services powered by a.i. meta says the a.i. sand box, i think of cats, is a testing

playground for advertisers to try new generation a.i. powered tools to build and improve campaigns. meta says the features are available to a select few right now, but the company will expand access in july. apple will open an online version of the apple store in vietnam next week. this comes weeks after the first store in india tim tcook says it will do well with younger populations in countries with few iphones. coming up, new overnight, hawkish comments from the fed governor who says the central bank should be prepared to keep raising rates. we have details next. look at the s&p 500 winners and losers as we head to break

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good morning welcome back to "squawk box" live from the nasdaq market in times inqsquare the nasdaq is looking to be higher by 32, joe. fed governor michelle bowman speaking early this morning at the symposium in germany she said the u.s. central bank should be pre-tpared to lift interest rates she said she wasn't confident the fed is making enough progress slowing down economic activity and inflation we told you yesterday about similar comments from fed president tom arkin. unlike barkin, bowman will have a vote in the june meeting implying mr. barkin will not i don't know

she doesn't think the fed is being effective enough of slowing the economy. when i hear things like that -- >> that is the unfortunate byproduct. >> it is not a byproduct it is all they got it is such a blunt force negative consequence and unintended negative consequence of the tool should tell us this is not the optimal way it is the only way the supply side is where you should work. not the demand side. killing the demand opens the supply energy whatever we need labor. get people to work ways of easing inflation that don't entail getting people put out of work. 5% we're shooting for 5% unemployment do the math. >> never said that >> you 4 million people, i'm sorry. inflation is bad

you won't -- inflation won't be a problem for you. >> you can't afford the eggs that have come down in price because you don't have a job. >> inflation is better joining us is greg branch at veritas financial group. lead writer for the wall street journal live market coverage and she is is a cnbc contributor greg, you are up there i'll be right with you, gunjan greg, i'm like the chorus or gr groundlings. you understand what i'm saying, greg is there a better way to manage an economy than having all of the different people willing to talk at any time and we got to report on it breathlessly? >> i think you might have hit it on the head a few seconds ago, joe. this may be the only way given how we are structured.

i'm sure we are all love the answer to come harmlessly from the supply side. how do you increase the supply of labor without triggering the politicians? it is something the coupntry has to deal with we need more workers wage pressure is the case. >> we can't pay people to stay home that is another politically unpalatable thing, greg. >> right barring the extraordinary circumstances, entitlements need to be addressed. they drive demand i do agree with what the fed governor said. it is binary the fed should be prepared in case there is a quick and painless resolution to the deb debacle. the politicians will do the work for them

>> how do you pause? they haven't paused. they raised 25 basis points. >> they did. >> they made it clear they haven't paused what do you mean we raised 25 basis points. what do you mean we paused >> i think the language is wait and see at least the language is different, joe a more of wait and see approve -- see approach. my personal feeling is they resolves in one extraordinary measure or another either we are going to default in some form or fashion. they postponed in a week or the president will supersede congress either leads to a downgrade of debt >> hopefully that's not it gunjan, we need another how many basis points given what happened yesterday? pacwest. how many basis points is implied

for the banks for the last month and a half add 100 on >> investors are expecting the bank crisis to lead to a tightening in credit conditions. that is why people started to price in the pause at the next meeting. what is fascinating is despite the fed comments we saw overnight, by and large, a lot of investors tseem to be looking past that in terms of decreasin volatility after the cpi the s&p moved 0.6% after cpi this year. that is some of the lowest volatility we have seen since 2019 before inflation came into the picture. that tells you investors expecting inflation to decline kind of sharp contrast to what we heard overnight from the fed. >> yeah. when i said 100 basis points you think 75 or 50

what do you think the credit cont contraction? >> i think that takes a long time to play out it takes a while for the ti tightening credit conditions to ripple the through the economy a lot of people thought it was a downturn fast and that is why the recession that everyone thought would come in the first two quarters hasn't come yet. >> do you think the bond market is wrong at this point or right, gu gunjan the two-year is nowhere near the five-year. people say you don't want to go into a 30-day bill because the te t t ten-year yield will be lower everybody thinks rates are going

down and talking about rates going up >> that is the fascinating thing. with the debt ceiling and a lot of other instances this year, a lot of the volatility has been centered in the bond market. the big question is as you asked is the bond market right or is the stock market right you are seeing investors position for a return to lower rate environment despite almost a year of consecutive rate hikes. the big risk is we do see more rate hikes later this year if inflation does and come down as a lot of investors are positioning for right now. >> dpgreg, when we are in a trading range between 3,600 and 4,200. i would say you are smart. you are saying this all along. now, greg, you missed this you have been sort of not very enamored of stocks we are back to 4,200

4,130. will you be proven right or you may have missed a good entry point? >> i may very well have. you said something similar to me back in august of last year as well >> yeah. >> this feels like august to me, joe. you know, as our colleague indicated, most of the market is looking for rate cuts in the back half of the year. i don't see a scenario which we get that and the fed doesn't see that at satisfome point, my view wile right or consensus will be right. looking at the 5% contraction. the view i'm articulating is opposite at some point, if the view i'm articulating is right and we have to prepare for a slowdown and recession, the market is

trading too high that reminds me of october of last year and that the market's view had to be corrected estimates were too high and market expecting a pivot or pause. there was no way we would get that this weyear, we are not gettinga ez easy resolution to the debt ceiling. i don't see a path to that the estimates have to come down. >> gunjan, when greg says august, i think he is talking like october october came after august. we were back down. that would mean we don't get to 4,200. a lot of people talk about that number being a difficult resistance level overhead. is that a more likely scenario to get close to the october lows >> i think that is a concern out there for many investors and traders who have seen a pickup

in volatility bets lately. the vix options market indicates that despite the really calm markets we are seeing, people are positioning for turbulence later this year. that being said, a lot of people enter the year expecting recession and expecting an earnings downturn. so far, earnings have been better than expected recession hasn't occurred yet. a lot of those doomsday positions and doomsday outlook have not played out. >> i wasn't asking you to tell me whether we -- it says wall street journal you are not managing the pension plan you do talk to people and you can bring it all together. that is what i was asking for. you understood that. >> sure. >> gunjan, thank you greg, i was asking you we will hold you to all of your

forecasts. we have gone nowhere for 18 months that is what you have been saying we have gone down. we stabilized. we will see what happens we'll know greg, thanks gunjan, thanks comi coming up, tesla announcing a recall in china. and katie stockton is talking about what she is seeing in the charts and whether or not bitcoin is making a stand here or a low. throughout the month of may, cnbc an celebrating asian american and pacific islander stories with aapi business leaders. here is ken natori president of the natori company. >> we are proud to celebrate the 46th anniversary as an asian founded and led independent family business. one reason we had staying power is we celebrated and broadcast

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welcome back u.s. equities in the green for friday a mixed week overall the banking issues raised its ugly head yesterday in a big way with pacwest we thought falsely deposits stabilized with that vendor. let's look at treasuries it caused a flight to quality and safety with the 10-year treasury at 3.4. 2-year treasury below 4% down to 3.9% it has been a tough week, necesm melissa, two-month lows for bitcoin. 26 and change this morning. tesla recalling every car it ever sold in china due to an issue with acceleration systems. chinese regulators say it

involving the probability of mistakenly hitting the accelerator pedal. they will make adjustments or add notification features. 1.1 million cars tesla built in shanghai or imported since 2019 well require an over-the-air update to fix the issue. the tesla bulls. tesla bulls and tesla bears and they the same people fa fanatics tread lightly. tesla bulls scream when we say recall it is an over-the-air fix. they go nuts if we don't specify. >> the labor involved and cost to the company where over-the-air upgrade >> we all had issues where you

bring the car in with the air bag is messed up and leave it there. you think 1.1 million cars have to go back it is not what it is. >> you press a button. >> i want to cover my bases. >> you are afraid of the trolls? >> definitely afraid that's why i don't have a blue ch checkmark. it may not be me it could be anybody. >> it could be me. >> it could be a total blowhard. it could be me, the total blowhard, or somebody else rj coming up, we talk to congress member french hill about the possible debt default. a reminder, you can watch us any time on the cnbc app imagine, a car that goes as far as it does fast. as sleek as it is spacious. as smart as it is beautiful.

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treasury secretary janet yellen will meet with top wall street bankers in washington next week to discuss the stalled debt limit talks she'll speak with a lobbying group whose bord is led by jpmorgan ceo jamie dimon and jane frazier both ceos warned repeatedly a default would be disastrous. meantime, the meeting is set for today between president biden and other leaders has been postponed. congressman hill, thank you for joining us this morning. >> you bet, melissa. great to be with you and joe. >> how is yellen going to do that i thought she did that by setting the june 1st x date.

>> looking back at 2019, the last time we had a debt ceiling fight, where we had a republican president, and a democratic speaker, and donald trump realized he had to cut a deal with the democratic speaker so he assigned his treasury secretary steven mnuchin to do that negotiating we haven't heard from treasury secretary yellen in this process, other than setting a date, which is as you know a date that can be moved around as you talked about at the top of the show so i think that janet yellen can be very constructive in designing what president biden's negotiating position should be with speaker mccarthy. >> how many times have you heard democrats say that the debt ceiling was raised cleanly during the trump administration every single time and this is just unheard of? what happened? you were there were you there when that happened speaker pelosi was -- was she actually using a raise on the debt cerealin inceiling as somee wanted >> oh, boy, did she.

>> they have never done that, according to the democrats. >> of course not of course not. and joe biden has never been the lead negotiator for president biden and joe biden's never voted for structural changes connected to a debt ceiling when he was a -- >> so he has. >> that's all nonsense absolutely so, yeah, 2019, speaker pelosi wanted to have some more blowout in spending, over $300 billion if my memory is right and that was agreed to by steven mnuchin on behalf of president trump and that facilitated the democrats for moving the debt ceiling. here, guess what, the republicans are in charge and we want to do the opposite. >> where is the wiggle room where democrats can claim that they raised it cleanly under president trump every time how do they say that what are they pointing to that makes them able to say that? they're not just lying, are they >> no, they're not lying they're just spinning the facts to suit their advocacy right now. the bottom line is that you got

a republican president, you had a democratic speaker, nancy pelosi wanted something out of donald trump in order to raise the debt ceiling for his administration and, boy, she got it >> congressman, i'm curious to, you know, what level of urgency do you think that aides and all the important parties are operating at right now because if you're an american household, and you're told that the end of the month you had to make a rent payment and had to feed your family and running out of money, you would be working day and night to figure out how you're going to pay the bills so where are we in terms of 1 to 10 the urgency on capitol hill >> i think that's -- if 10 is urgent, we're at 10, and who has been the leader, who has been the adult in the room on this from day one becoming speaker. that's kevin mccarthy. he met with president biden at his request to have a responsible and sensible increase back on february 1st and we have our 100 days of work our list, our priorities, we passed a bill across the house floor to raise the debt ceiling,

with constructive changes to both spending and regulatory policy we heard nothing from president biden in 100 days, so it is the biden administration who drug this out, thinking they could get a clean debt ceiling, which is not possible. chuck schumer can't get that done in the senate and we can't do that here in the house. we want reforms and we want spending caps. so we have that sense of urgency and kevin mccarthy's led the way on that. and one other final point on that, if this is such a big deal to democrats, nancy pelosi could have raised the debt ceiling in december with she and president biden by themselves and that didn't happen before the end of the congress >> what would raise the urgency even more? i'm curious. some people are saying, you know, the markets have been fairly calm, but if we saw a big market sell-off, that could move the needle here in terms of getting the parties to move forward. is that the case has it come to something, you know, bumping up against the debt ceiling, do we have to be on the verge of default, see a market sell-off in order for you

guys to come to an agreement >> well, you'll have to ask the white house that question. this is why i think janet yellen can bring some sense to white house policymakers and negotiators because of her long experience at the fed and at the treasury look, we already know it is urgent because we have seen the inversion in short treasury bill rates around the debt ceiling date so we explained to our conference and one reason why house republicans took action passing kevin mccarthy's bill to raise the debt ceiling, curtail spending and improve the regulatory outlook to have a better growth forecast. >> i wanted a quick -- we heard that republicans say we're only going back to 2022 levels of spending, democrats say -- they're saying this is just a horrific ultra maga cutting veterans benefits and all -- people are going to lose medicaid so i don't know which is true. since 2022, has the increased interest rates caused us to spend a lot more would you need to cut a lot of

discretionary spending are you cutting a lot of discretionary spending to get back to 2022 levels? >> not really, joe don't forget we plussed up all that spending during the pandemic we're at record federal spending we're also at record federal revenues thanks to the trump tax reforms. what we need is to curtail s spending, get it in line with gdp, and not be forecasting deficits each of the next ten years. that's unsustainable that's the position of house republicans and we want to get democrats to vote with us to go back to common sense budgeting. >> congressman hill, great to see you. thank you. >> thanks, melissa see you. coming up in the 8:00 hour, democratic congressman ritchie torres will weigh in on the odds of the default but, first, much more on today's top corporate story, elon musk picking a new ceo for twitter, rm ford ceo mark field what it could mean for tesla "squawk box" will be right bac

good morning regional banks, a looming debt ceiling showdown and the fed, just some of the issues facing investors on this friday we'll find out which issues matter most to your money and talk investing ideas

elon musk says he's stepping down as ceo of twitter in six weeks and tesla's stock is popping in the premarket we're going to speak to an auto executive named mark fields about the move and what it means for the ev market itself and the arms race in ai. hackers and scammers already using the technology we'll find out what cybersecurity firms are doing to prevent the next wave of scams and what you can do to protect yourself from being a victim the second hour of "squawk box" begins right now good morning welcome back to "squawk box" here on cnbc we're live at the nasdaq market site in times square i'm melissa lee with joe kernen. becky and andrew are off today we're looking higher across the board with the dow looking at

145 points the pzs&p up by 17 and the nasd higher by 35 points. megatech cap stocks doing well treasury market here, two-year note yielding 3.91%. and the ten-year, 3.41% this morning. dom chu with a look at this morning's premarket movers >> joe, melissa, let's talk this friday edition of morning movers with a check on tesla, helping to power the nasdaq trade. it is up by roughly 1.5% just around 400,000 or so shares of premarket volume a couple of different headlines out there today, which are kind of balancing out and leading to gains from yesterday's gains as well first on the elon musk front, where he's already tweeted out that he's found a new ceo for twitter, it is a woman, she's going to start in the coming weeks, at which point he'll step down and take on the role of executive chairman and chief technologist xxx corp "the wall street journal" is

reporting that linda yakarino is in talks to become the next x corp. twitter ceo. nbc universal is the parent company of this network, cnbc. tesla shareholders may be optimistic with the new ceo at twitter, musk can devote more attention to tesla, optimism there. the company is recalling over 1 million vehicles in china over a defect that can affect braking and acceleration it will be an over the air so to speak software update. tesla shares on balance up nearly 2%. then you got shares of icon enterprises up over 4%, thin premarket volume so far. storied activist investor carl icahn's company, a stock buyback, 27% of shares, after losing more than a third of its value after a scathing report. the buyback marks the first time the company has adopted a formal share repurchase program since

1987 that's according to regulatory filings. now icahn enterprises is up 2.5% pacwest, in the wake of yesterday's stock plunge, tied to fresh quarterly file ings saying it lost deposits in the week ending may 5th due to reports of looking into strategic alternatives in investor capital after a 23% drop yesterday, shares are up right now about 1.75%. watch western alliance, zions, comerica, all of them, of course, had outsized losses yesterday and are trying to bounce back modestly from a relative basis so far premarket, joe. >> all right very good, dom thank you for that we'll see you again soon >> you got it. >> okay. our next guest says the market is acting very skittishly in light of the ongoing debt ceiling negotiations joining us the managing partner at dcl and cnbc contributor.

always good to see you >> good morning. >> i would have thought you would have said the markets are fairly calm considering what is coming down the pike we're at 4130. we had alphabet at $115 billion in market cap in two days. is this skittish >> so, okay, i look at it this way yes overall, the market is doing fine if you take out the top seven stocks, the market is down for the year if you look at other sectors, cyclicals, they're all trading as if we're going into recession. ford, gm, delta, industrials, they're all at earnings troughs now. so we have to be careful as to what is going on in the market the big boys are doing fine, that's where the money is going. that's the safety trade. we have seen this happen before. and the valuations of these big tech -- we own them, full disclosure, just not the same size as the market and i think

what you're seeing there is investors are moving towards the microsoft, the googles, google was in the doghouse until yesterday. but now the money is going there and it is also going to bonds, to treasuries, and you're not really seeing the broad depth that you need for a market to say we're going to function and you got this looming, you know, debt default coming out there. it is a very defensive market where people are playing offense in the tech sector, and we know that if things really do slow down, that sector can come down pretty hard too. >> so when you take a look at your holdings and some of the big cap tech stocks, at what point do you say it is too expensive? or do you say, you know what, there are things at work in the market, whether the regional banking crisis or the debt ceiling crisis that we're in right now that, you know, justify this premium at which these stocks are trading, either relative to the market or relative to themselves

>> i think when we look at it, we want position sizes in these big techs, most of them, but much smaller than relatively to what the market is what i'm looking for is opportunities in areas where the market is not really focused on that is defensive in nature but still going to grow. areas and consumer staples, companies like hallion, a spin-off of glaxo or j&j which spun off ken view. you have areas of healthcare, consumer staples, specific companies you can position yourself, so if you do get volatility, these companies are going to do well and even if you don't, fundamentally these are secular growth companies there is opportunities there and depending what happens the next two, four, six weeks of the debt ceiling, we can reposition the portfolio to say where there are going to be more -- >> do you think the playbook or the blueprint for how the market reacts during the next month or so to what is going on in washington is 2011, where the s&p 500 lost 16% in ten trading

days, do you think that is what we should expect if we go to that limit >> and honestly you know i'm not a former baron anyway. i think the short-term, we could get the volatility when people pull money out, we already have seen a lot of money coming out of financials, you could see money coming out just to get defensive because you are getting paid to be in bonds. it is very different from what it was the last ten years. in the short-term, yes, you could see the volatility and you get the sell signals, and you do get, you know, algo selling in a large way, you can see some pressure on this market. it could all come back in a fast way too. i think in the short-term, we have prepared for a lot of volatility. >> you should get paid a lot more to be in bonds than you're getting paid that's the whole rub that's what is so confusing. >> exactly >> ten-year is no bargain. i don't want to buy the ten-year it is better than it was

if it was five -- >> right what is happening people are hiding out in the one to six-month treasuries. >> that's no good either that's duration rate >> it does nothing for you, that gives you six months of -- that's why -- i don't know, you know what i'm saying i'm not doing it, but i'm just telling you what the market is seeing right now >> that's the rub, the market won't let you make money and that's how smart the bond market is, because the feds, maybe the ten-year really is still a good buy here because eventually you're not even going to be able to get that. >> yeah. i mean, that's what the bond market is saying, you got kind of two things going at each other and we're going to have to see who is right, especially with all the overhang coming up in -- >> right >> thanks. good to see you. >> thank you >> what time is -- when is the tee time >> tomorrow, joe work today i'm going to the office right

after this i know. >> that's a switch on a friday? >> a lot going on. got to be there. >> a beautiful day he's got phones. can't you use phones at the fancy course of yours? >> you know we can't, joe. >> i'm kind of glad. people -- >> it is a good thing. no, i'll be there. it is beautiful. >> don't need that. >> enjoy coming up, elon musk tweeting he's stepping down as ceo of twitter what the move means for the evmaker and his focus. the debt ceiling meeting delayed. shgt ijut the latest out of wainonn st a bit "squawk box" will be right back. ♪ 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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because we're busy women. we don't have time for lag or buffering. who doesn't want internet that helps a.i. do your homework even faster. come again. -sorry, what was that? introducing the next generation 10g network only from xfinity. the future starts now. tesla stock jumping yesterday after elon musk announced that he'll be stepping down as ceo of twitter in the next six weeks joining us now is mark fields, former ford motor company president and ceo as well as cnbc contributor i guess that was kind of a -- not hard to understand why it happened, mark, but is there a logic that will play out over time if elon gets to spend more time at twitter -- sorry, freudian slip, at tesla? should the stock be trading higher on that >> well, you're seeing the early returns obviously.

the market reacted favorably to it the bottom line is a lot of investors, shareholders were concerned that he was spending too much of his time there it was basically sucking up all his time and now that he's going to become exec chairman, chief technology officer, he'll be able to spend more time than he has been over the last six, nine months on tesla, but let's put it into perspective versus a year ago, he's got another company that he's exec chairman and chief technology officer of. so, you have less of elon more than you did a year ago, but you have more of him versus the last six to nine months and i think investors are reacting positively to that >> you -- people can argue that, you know, it is not true that we only use 10% of our brain, but i don't know what elon uses of his brain. you got spacex too think of -- he -- either he can do it all or there are limits to how much even elon can focus on.

>> yeah, that's true but it all comes down to, joe, the kind of team you build around you i think what musk has done, you know, let's use tesla, for example, in the investor day they had about a month or two ago, it was the first time he trotted out his management team. he had 12 or 13 high level executives at his company going through their various presentations. and it was pretty high quality presentations. so he not only has this gift of being able to kind of describe his view of the future, and a vision for that, but his other gift is he attracts people to come to these literally when -- at the beginning, these impossible ideas and rally around them and execute on them. i think that's the key to him going forward is not only these different companies that he's overseeing, but obviously building great teams and, you know, he has a good track record of doing that, although he grinds through people pretty quickly. >> he does and we used to hear about a lot

of -- it is kind of interesting because the journal had to have been working on this story before yesterday, and now, i mean, it is on the front page about zach kirk horn, he keeps things running at tesla. cfo and elon just calls him zach, like we're supposed to know who he's talking about. >> well, you know, the most effective cfos use their cfos not only for their functional knowledge, keeping the books, doing the forecasts, making sure there is right controls in the company, but also using them almost as coos as you know, the cfo gets to see the entire business. and, you know, i don't know zach personally but he's been cfo for the last number of years. and obviously he relies on him a lot. and he relies on some of the other folks that we saw come out in that investor day, which literally we have never had a chance to kind of see before so, it was quite interesting >> for twitter he might be the

antimusk elon blasts out pronouncements to 137 million followers zach has 63 followers and his account is locked. can't even see it. >> well, you know, you want your cfo focused on their job, right? i think that's what he's doing >> just to broaden the conversation, i do see a few other luxury carmakers, people are buying a couple of their evs, nothing close to tesla, though where i live in new jersey, it is about -- it seems to me like it is 50% tesla. it is mind boggling. and a white one goes by, and then a red one and then a blue one and another white one and another red one. i got tired of them, they all look like cookie cutters but they're really not many beamers or mercedes or ticans around yet. >> the mercedes line was

launched a little less than a year ago that's starting to do well bmw launched their -- a couple of models of their full evs that are off to a good start, but still early days to your point, as you know, there was -- a number of startup ev companies, you know, whether it is rivian or whether lucid, et cetera, those companies are trying to scale and as you're seeing from their recent results, you know, the auto business just sucks down capital and because they haven't been able to scale, you see their cash levels dwindling, so anybody that is going to go purchase one of those vehicles has to have a lot of faith those companies are actually going to be around in the next, you know, three or four years and i think that's one of the reasons you're seeing tesla continue to do so well, but the established oems, they're coming and coming hard and fast and will be interesting to see what happens. >> are they coming hard and fast, mark what we learned from ford, is that ev sales were down 25% year

on year in april the ev sales were down more than 50% year on year in the month of april. it seems like it is a lot harder than what the legacy oems thought it would be in terms of the road to the ev market. >> well, you have to put, i think, ford sales for the mach e into perspective they were retooling the plant to increase capacity. but overall, the automakers, i think what the established automakers, what they face, if you look at somebody like tesla, tesla at their heart, they're a software and battery company that is becoming a manufacturing company. and the automakers are engineering and manufacturing companies that are trying to become battery and software companies. i would say that's a tall order, but they're hiring the right people, coming out with the products, and they know scale. they know how to get costs down. and, you know, they have very strong distribution networks

i think it is going to play out over the next 1 to 2 to 3 years when all this capacity comes on from these established oems to see how they do in the marketplace and if consumers really, you know, are attracted to the evs and some of the challenges around charging and costs. >> and in theory, the costs have come down, mark, haven't they? when you compare year on year in particular and lithium costs come down dramatically, commodity costs have come down, so shouldn't we be seeing some sort of improvement in margins to come in the coming months and quarters ahead for the oems when it comes to evs? >> you have seen to your point, some of the base elements actually come down and i think over time what you see probably in the next probably three to four years, you're going to see cost parody between internal combustion engine vehicles and electric vehicles you're starting to see that in some of the pricing that all the

pricing productions that tesla has, the model y is down like 20% since the beginning of the year, and i think, you know, their input costs are going down, they're getting more efficient in their manufacturing. you're going to see costs parit between ice and evs. the cost is the convenience factors. as thee evs come on, and as the costs comes down, are they going to be willing to deal with the larger -- longer charging times and just the availability of chargers which we built out over time and the question is are the products coming a little too fast before the charging infrastructure and before the ability to kind of reduce these charging times to make it convenient for customers i think that's the big question as these products come on the marketplace. >> you got those numbers that melissa talked about that's rough and then you got these -- the polls that it is going to take

some convincing or prices have got to come down to get the average person say i can't wait to buy an ev and you look at what the government or biden administration is trying to migrate people to that, it is like a mile apart on what people want to do and where we're supposed to be by 2030 you think that's all going to take care of itself, mark? >> well, it will take care of itself over the time, but you're exactly right, joe when you do polling of consumers and they say, hey, would you consider an ev, there are some that won't, right, for the time being, because they don't understand the technology or, you know, they don't really want to step up in the price, but the ones that say, yeah, you know, i'll consider it, they'll consider it until it comes time to then actually put their money across the table and that's when they're going to do their homework, right they're going to do their homework not only how does this cost versus the equivalent ice vehicle, but they're going to look at, hey, if i live in an apartment and don't have a

two-car garage i can charge my vehicle, what are the convenience factors here for me? and if it is not as convenient as filling up at a station, and that's going to factor in their buying decisions so i think this will solve itself over time, but, again, it is this mismatch between all the products coming and at what point does the consumer behavior change and that charging infrastructure build out >> when i am able to pump my own gas, i can do it in a minute and a half with the credit card. i'm done i'm in, i'm out. now i'm going to spend more time boiling water and cooking because my stupid electric stove because i can't have a gas stove anymore, mark, then spend 45 minutes to charge -- i don't have the time. i don't have the time. i'm sorry. >> you know, it is a really interesting point. if you think what is the one luxury that every demographic group has and that's time, and that's really going to factor

in >> time waits for no one gordon gecko the only thing -- what the only thing you can't get more of. mark, thank you. appreciate it. >> you bet >> all right lower the cholesterol, don't have much time >> we'll all benefit from that. coming up, regional banks and commercial real estate exposure we'll hear from the rxr realty ceo and the impact on the regionals. "squawk box" will be right back. time now for today's aflac trivia question. since 1960, how many times has congress raise the debt ceiling? thane swer when cnbc's "squawk box" continues could really get d to this retirement thing. ahhh! coach k, there's a goat here. the story of my life. no coach, there is a goat here! whaaa! what's this? a thousand dollar hospital bill? but i have good health insurance! gaaaaaap!

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hamptons summer rental market, which now has a supply glut. homeowners are starting to cut prices to entice more renters, but there is one bright spot robert frank has found -- he joins us from bridgehampton. did people realize there is one road out there two lanes? >> one road and this morning at 5:00 a.m., there is already a traffic jam on route 27. it is just crazy and if you're a renter this season -- >> what's wrong with the jersey shore. seaside heights, get some ink. that's what i'm doing. >> yeah, well, if you're -- it is still -- if you're a renter, that's going to be good news this summer. but if you're a homeowner, not so great news. there is just a flood of rentals coming on the market this summer and just not enough renters. there are now 5,700 homes for rent this summer in the

hamptons that's about twice the levels that you saw pre-covid now, homeowners have already cut their prices between 10 and 20%, but they have to cut a lot more if they want to bring in renters, some of them are offering free chef services. more importantly, shorter term rentals, giving renters a chance to do a week or a month. the problem here is supply and demand there is a huge supply because a lot of people bought homes in the hamptons during the pandemic, now they want to rent those homes for 2021 prices. they're not getting those prices and then on the supply side, we heard about the cuts on wall street, the lower bonuses, the volatile stocks, all of that, the hamptons still very dependent on finance and wall street that's reduced the number of rentals. but the one bright spot as you mentioned is that the very top of the market, and specifically ocean front homes like this one, we're in a house this morning from bridgehampton, to about 12,000 square feet of brand-new

house, nine bedrooms, 11 bathrooms, four kitchens, beautiful 50-foot pool overlook the ocean and the price for this house, guys, is $600,000 for just two weeks so that's $300,000 a week. that may sound crazy, but one house on the ocean, i don't know exactly where, recently rented here for this summer for one month for $2 million so, very strong at the very top, the rest of the market is just flooded with supply now. >> wow you know, those people, though, they take blade out there, i think. most of them are able to do that they don't have to sit -- dom chu tells me the road to lvi is no bargain it is just as bad to long beach island maybe go west, young man oh, they already took -- no cross talk with robert. >> you precross talked. >> i precross talked with him and then they kick him out of

the shot. >> to stop you from talking to him. >> but it doesn't. >> i'll just go to break. still to come, the risk of commercial real estate loans for regional banks, we'll talk about the exposure with rxr realty scott rechler. and michael verdict will join us to talk out abai security risks. you're watching "squawk box. rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

today's meeting with president biden, top congressional leaders, has been postponed until next week. is a delay a positive development? kayla tausche joins us now with more from washington kayla? >> reporter: the news of the postponement coming yesterday after market close and after two days of staff level meetings that will continue through the weekend as negotiators try to find common ground between two fairly distant positions at a press conference yesterday evening, house speaker kevin mccarthy said the decision to delay was mutual, but he suggested the administration didn't want a deal >> the white house didn't cancel the meeting. all of the leaders decided it is the best of our interest to let the staff meet again before we get back together. i have not seen from there a seriousness of the white house they want a deal it seems like they want a default more than they want a

deal >> reporter: that sentiment coming after some marathon meetings this week yesterday over two hours with white house legislative affairs chief louise sutera huddling on capitol hill with leader. they suggested the development was positive and staff meetings were productive, but there still wasn't enough for the principles to get together and discuss. among the items seen as ground for compromise, the top one on the list is permitting reform. white house energy adviser john podesta supporting those efforts in these remarks this week >> the administration is serious about building a secure energy future that strengthens america's economy. if congress is ready to do the same if congress is ready to do the same, they'll pass bipartisan permitting reforms that includes the white house's priorities >> reporter: other areas of focus, clawing back unspent

covid aid which president biden mentioned. capping spending levels into the future and requiring work for those on medicaid and food stamps it is the last two that could prove to be the thorns in the negotiations which would need to reach some conclusion by the time president biden leaves for asia on wednesday. melissa and joe? >> kayla, thanks kayla tausche with the latest from washington. coming up, how hackers will use ai and machine learning to target corporate america we're going to talk about the dangers to companies and consumers and what america's top cybersecurity firms are doing to prevent what could be a major problem. check out the futures at this hour we're up a little bit. triple digits on the dow, nasdaq up as well, s&p hovering in that 4100 area. we'll be right back.

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♪ ♪ do the work, before the work. bodyarmor lyte. more than a sports drink. yesterday morning, actually for the last week, really, it felt as though the bank risk was easing, but then pacwest revealed its deposits plunged earlier this month and particularly if there is a recession, jamie dimon warned in a bloomberg interview that commercial real estate loans could take a few banks down. joining us now to talk about the risk in commercial real estate, scott rechler, ceo of rxr

realty you pointed out in the past, scott, you have a, you know, decade of basically zero rates and there is going to be liabilities and imbalances and all the things that we're seeing but you also pointed out this is not a new movie that we're watching here and in the past, time can sort of give us enough leeway to work these things out. do you still think that about commercial real estate a lot of that stuff comes due over the next three years, but you would extend and pretend or whatever it is called? >> i don't think extend and pretend is the right concept i think the point that jamie made is right, that the fundamentals get worse, things are going to get more challenging. i would argue frankly that even if the fundamentals stay strong we still have a problem in the fact that there has been literally hundreds of billions

of dollars, trillions of dollars frankly of commercial real estate financed in a low to near zero interest rate environment over the last decade that now needs to be refinanced in these more normalized higher interest rates. and when you do that, the borrower can't get as much proceeds as they did in the past and so we're seeing this throughout the country in our lending business and it is -- these are borrowers and lenders that were frankly conservative responsible, 60% loan to values, but when you have the interest rates spike up as they have, and let's say cap rates which goes from 4% to 5% which brings down the value and the loan val ue moves, today they would have to write off half their equity, $20 million gone and the loan would be $40 million, not $60 million.

you have to go back to their inve investors and say by the way, it is half of what it was before and i need $20 million to refinance this loan. that's happening across the board. you saw it, the data is looking backwards. you look forward through the window, you see how much of this there is there was record level of multifamily investments in the 2021, almost $350 billion that was a lot of it financed short-term because the rents were going up and now we have to deal with the day of reckoning of the higher interest rates and it has become procyclical in the sense that the -- particularly since the credit crisis, this is where it is a slow moving train wreck has picked up speed because the banks are being told by the regulators, by their shareholders, by the boards, you know, reduce your commercial real estate exposure and do that painting all commercial real estate with the same brush, which means they want their existing book of business to be

refinanced, which would mean there needs to be another bank out there that is willing to taposure to refinance it the funding gets clogged which can create a much more pronounced challenging situation, particularly for the regional banks, which had a heavy exposure and concentration to regional -- to commercial real estate. >> the last time you were on, you mentioned a lot of the same things and that's why i said extend and pretend. you said the private sector can work it out eventually are you more bearish now do you think there is going to be a horrific day of reckoning now that takes some banks down, like jamie dimon said? >> you go back and look at the savings and loan situation we had, i think this is going to bear out like that and the way you can prevent it from being worse than it otherwise would be, is make sure there is liquidity in the market the big challenge is we don't have liquidity in the market, so

the way that the private sector can work this out is you need to incent banks and insurance companies to make new loans today, good loans today, and actually differentiate them from legacy loans if you're make a loan today, you're making it with clear transparency of the macro environment, the high interest rate environment, these are the best loans you can make. we're making them as much as we can. one of the back up the truck moments. there is such illiquidity in the market you need the system encouraging banks to do this if they did that, even regional banks can make the loans and as they make them, they'll get higher returns, and they'll strengthen their business as they go through that if there is any place where we could -- the regulators could be helpful, and let the markets function and clear the plumbing is to actually focus on new loans and the new loans then will work out the old loans. and that means people take losses

banks will take losses, investors will take losses, but that's the nature of capitalism. we need to make sure there is actually liquidity in the market so capitalism can function. >> what are regulators supposed to do? tell banks to -- tell lenders to not worry about -- i don't understand how it is -- >> one simple place to handle this, joe. right now, if you look at a bank and you're a shareholder, regulator, look at commercial real estate and say, wow, they have 18% of their commercial real estate exposure let's say they segregate it and put out regulations, legacy loans that were made in this low interest rate environment that are likely to have challenges of being refinanced, and new loans and then look at that number, you say, okay, 10% legacy loans and 5% newly originated loans, which are originated and healthier. so you're not going to be penalized for having new loans because those are good loans and that will help set up the system that then people will bring equity in and new loans will be

originated by other banks to then refinance their book of business of legacy loans so, even the segregation of that and the clarity of legacy loan versus a new loan i think will go along way to enabling the market to be able to function more effectively. >> scott, you mentioned this is the back up the truck kind of moment what kind of rates are you pulling in right now when you're lending? >> we're underwriting conservatively and we're -- for us, we do mes loans. we're getting midteens returns, and so it is like we're actually getting equity-like returns but for debt-like structures so this can't last and there is a lot of money on the sidelines, you heard john gray talk about black stone wanting to get out there and support the regional banks and help provide some liquidity. >> isn't that a path to what you're prescribing if john gray gets in there and

partners with regional banks, that will help make the good loans in this environment with some clarity >> i think longer term that's a solution but even black stone, as large as black stone is, is a minnow to the size of commercial real estate loans $1.5 trillion of commercial real estate loans that are maturing i'm talking about the good loans. i'm going back to, joe, to your point, i'm not talking about jamie dimon talking about there is deterioration of fundamentals i'm saying the fundamentals hold and this is a problem. you take office as an example, which has structural issues in terms of the future of office hybrid work, how people are working with ai, everything else, and you can't get a lender to actually finance an office building today the only lender that finances an office building today is a lender that actually has that loan today and they do it p kicking and screaming. >> we have to leave it there

scott, commercial real estate on everyone's mind. we'll see. we'll know in six months, probably, how things are going we'll have you back. thanks, scott. >> i appreciate it coming up, scammers and hackers already looking at ai is a potential tool to hurt companies and consumers. we'll talk about the threat next a quick stock to watch in today's trading session. apple will open an online version of a store, it comes weeks after the company opened it first brick and mortar store in india a programming note, monday on "squawk box," an exclusive interview with paul tudor jones, his views on the markets, the economy and the looming debt inshowdown "squawk box" will be right back. . like your workplace benefits... and retirement savings. with voya, considering all your financial choices together... can help you be better prepared for unexpected events. voya. well planned. well invested. well protected.

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that was awesome. super-fast internet today. with even faster speeds tomorrow. you might wanna buckle up. only from xfinity. the future starts now. meta unveiling some new tools and services powered by artificial intelligence to help advertisers. they say the a.i. sand box is a testing playground for advisers to try out new a.i. tools to build and improve campaigns. meta says access to the features are available to a select few right now but the company will begin expanding access starting in july. regenerative a.i. technology could turbo charge cyber crimes like fishing attacks

joining us with who is best positioned to win the a.i. arms race, michael, great to have you with us. >> how are you >> if hackers and scammers are mostly trying to impersonate or make an individual believe they know them in order for them to hand over information, i would think a.i. is a really powerful tool >> and you would be right. right now the scammers, the hackers, the attackers have gotten a jump on the defenders for sure they are quickly adopting and adapting to the new technology in regenerative a.i. they are using technology to enhance their attacks. i think fishing is a very good example. we're all familiar with fishing. some might send you an e-mail and say click here to fix your account and if you do, your computer can be compromised

leading to financial loss or compromising of your company's assets a.i. can generate them more believable and competitively than ever before and an even scarier scenario where deep fakes might be used to impersonate your ceo or cfo's voice. they might listen to some interviews here and imitate that voice and leave a message saying i need you to wire some money or send details about our company, including even just business details and then they've struck a win against you. so right now we are seeing companies that are offering defense tools and have offered defense tools for a while. respond, they're offering new suites of technologies, google announced one, microsoft announced one, a bunch of other companies have announced one i'm a shareholder in many of

these companies, as can you imagine, public and private, and you're going to see a lot of tools that are coming up to combat the effects of a.i. that are being used by hackers but for sure right now the hackers have the jump. by the way, the winners are going to be the arms dealers i think bill gates said in 2004, i think he was on stage at davos and said we're going to have the end of spam within two years that's 2006. you and i know very well that spam has continued to flourish and the weapons to fight the increasing sophisticated attacks need to be upgraded all the times. so the arms dealer, the thorough bred cyber security companies are often going to be the winners generation after generation is my basic view. >> that scenario you outlined with the cfo, some sort of fake voice, that actually happened in europe where there was a fake voice mail, the cfo left

supposedly and somebody actually wired money out of the company's account. it's already happened even prior to these leaps and bounds advances in regenerative a.i there's also the use of regenerative a.i. in coding and this i think is maybe an underappreciated aspect of a.i. and that is the help in the back to code things i would imagines that a huge tool for hackers as well when you mention the arms race and the arms dealers winning, who is best positioned at this point in handling these emerging threats? >> so you're right a.i. is very good at coding. a.i. is very good at coding by accident the big models that are very famous, the gpt models, these llms, large language models, have basically learned how to code by accident that may sound funny to you but they're very good at doing

words, essays and paragraphs and some sub suit are coding methods and functions. some of those coding activities could be used by scammers and hackers to insert or create a scale a lot more malware that might live on your machine and find things or even generate emails from your machine, right, which is really, really scary. in terms winners, again, i think that -- we used to say in business maybe joe kernen, maybe you would say in business, melissa, that no matter what happens, the lawyers always win it turns out whatever happens in s cybers, the cyber dealers will win. s some, like crowd strike or others that are very, very big i think you can imagine a new raft of companies in silicon

valley of the world and i think we're all looking for companies who would use a.i. to combat cyber a.i. attack. you can bet your bippie we're all looking for those companies and geniuses generating new technologies to deflect and counterattack and do penetration testing of potentially vulnerable companies and so forth. there's a lot at stake the hackers are very smart, some state sponsored and some just out to make a back they need to be defeated over and over again >> thank you >> my pleasure >> coming up, katie stockton joins us to talk about the charts, technical move, indicators that might give us insight into what lies ahead on the last trading day of the week here and next week plus president biden and congressional leaders postponing

a meeting. we'll have that with representative ritchie torres.

good morning futures are pointing to a nice

pop for the dow this morning and in focus for us today, regional bank shares bouncing back a little bit treasury secretary yellen set to meet wall street bankers a so-called clean increase can't pass we'll ask richie torres if he believes that that's true. and nbc universal advertising chief said to be in talks to run twitter for elon musk. we'll get into the potential impact for the social media company and for tesla and for the peacock as the final hour of "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we're live from the nasdaq

market site in times square. take a check on how u.s. equity futures are shaping up before the open on this friday, the s&p looking to add 14 points, dow up by 130, nasdaq higher by about 24 fairly calm considering what is going on out there in the world, particularly in washington let get down to the nyse and check in with mike santoli with more on the markets here it feels like it's calm out there right now. >> melissa, that's been the theme, hasn't it very steady market certainly at the index level, even as a lot of things push at the market from both directions yeah, we might get a fed pause that's what the market believes. earnings have held up okay debt ceiling and cyclical parts of the market are registering ke concerns about a slowdown, perhaps a coming recession this is a look at the s&p 500, right where we were two years ago. a lot of action in between

even though it's only a handful of stocks getting us where we are, that pattern since october is nothing to panic about. the breadth has been very weak recently if you look at any other measure, it looks like things are faltering a bit, flattish on a year-to-year basis so far it's kind of holding things together. a lot of the defensive parts of the markets outside of the fang-type growth names are working. apple has done a fair bit of the work for the s&p 500 this year this goes back two years you see where we are, right at the top end of this range. if anything, you kind of top that a little bit below that a few times. so there's definitely some stakes here in apple, $2.7 trillion market cap. hard to know what more you could get out of this. things like alphabet and amazon, the other mega cap growth names that really underperformed have perked up a little bit and perhaps had a little more head

room before they get to that sort of similar level where it's a real test. take a look at consumer discretionary relative to staples going back a year. you see from that october market low, the equal weighted consumer discretionary still holds a lead over staples so while there's a lot of concerns, materials are looking ragged, you have consumer discretionary holding, a lot of it is housing, casinos, but this pushes against the idea that things are eroding in terms of the main street economy in a quick way, melissa >> to get at your point in terms of the big guys doing all the work, the nasdaq 100 we're seeing at levels not seen since august of last year. it's funny you mentioned apple it was said last week to sell

apple. we saw life in alphabet, a huge surge of market cap added on the developer's conference and its talk about a.i., but unless there's sort of a trade-off, handoff within fang, if apple falls, i don't know what happens. >> exactly so it's hard to know if you have a direct answer on a couple of stock basis for apple if it has to pull back a little bit here i think the bigger question is do you get any kind of catch up from, you know, the thousands of stocks that have been doing almost nothing and actually some of them looking a little bit oversold here. people have looked at history. we've had these huge breadth divergences. a little more than half the time you get a catch up in the soldiers to the generals as opposed to the overall index is faltering. it's not necessarily a clear bet either direction >> my thanks, mike santoli >> if the apple does fall, it probably will be --

>> far from the tree it's frightening >> maybe it's good i thought it was good. i thought it was nice. >> i think i need some time away >> you just got here >> i know. >> joining us with a look at the latest technical trends, a cnbc contributor, how are you feeling, katie i'm not feeling good about 4,200. are you feeling any better about it a lot of it is apple, very narrow, the breadth isn't great, bitcoin broke under some recent support that you mentioned you got anything good? >> you know, well, i don't know how i feel but i know the market certainly seems to feel indecisive right now there's a consolidation phase kind of across the board, not only just in equities but in yields as well this is a period of sort of a balance between supply and demand and that shows that investors don't really have

strong conviction in the next directional move our indicators generally still point lower. we never got that confirmed breakout by the s&p 500 above 4155 and that's a near-term setback and we emphasize near term because there are indications that will have a better second half that doesn't mean a parabolic up trend but enough improvement that with the next up move we should start to see some long-term momentum buy signals but for now the market actually is contending with some short-term sell signals and that includes the nasdaq 100 index. tom demark and his indicators, there's one of those pesky little sell signals that supports a two-week pullback for the nasdaq 100 below resistance of about 13,600. >> second half so it's not early may but we're not even halfway through so you're talking maybe better starting in july

so in the meantime, how much of a side ways or even a pullback are you expecting in the s&p would it reach 4000? >> i would think so. you know, i'm keeping an eye on the 50-day moving average, which was around 4055 last i looked. it not a major support level but if it's breached, i think that will change that sentiment so it more bear ish leaning, see downside follow-through. we've been looking for a higher low versus 3800 because of the vix [ breakdown w definitely bent on getting back to that breakout point some challenges. nothing major. we would be interested in

reevaluating and buying opportunities into the next down draft because as mike said earlier, there are a lot of stocks out there that are oversold and to the extent they're oversold and not breaking down, there may be some opportunity there. >> where's the breakdown, like 25 >> the support for bitcoin is just above 25,000. >> i think that's where you said it had to get through 25-5 and i think it did get up to almost 30 so you think it gets to 25 and finds support there? >> yeah, it would be a very natural place for support to come in for bitcoin. and we are seeing it get into more of that sort of tied to the risk on/risk off trade as opposed to tied to what regional banks are doing. >> they're wrapping us up. are you surprised that the 10-year and the 2-year are down at these levels? do you think they're in a -- you said yields are in an up trend you think we're going to resume

that up trend in. >> there's still long-term up trends but corrective phases are under way. we have a neutral short-term buy as below 3 1/4 would target 2% and we wouldn't rule out a deeper corrective base within the context of the up trend. this might be next year, not this year but we look for a higher low >> i don't want to think what would do that. might be in the banking. have to be significantly worse than what we're seeing now because the fed, you know -- >> i think we have a little time at least >> well, depending on inflation, i guess. thank you, katie stockton. >> of course good to see you. >> coming up, elon musk teasing his pick for twitter's ceo stay tuned you're watching "squawk box" on

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we've heard nothing from biden in a hundred days. it's the biden administration who has drug this out thinking they could get a clean debt ceiling, which is not possible chuck schumer can't get it done in the senate and we can't get it done in the house >> that's the vice chair of the house financial committee, joined us earlier on the show. a meeting of congressional leaders and president biden that was scheduled for today has been pushed to next week. treasury secretary janet yellen will meet next week with top u.s. bankers joining us is congressman richie torres of new york always great to have you on. good to see you this morning >> thank you for having me >> you would know. i think you can probably sniff it out, is there a deal in the air to be had? we heard that this delay is not for any reason other than the staff -- of the opposing viewpoints and maybe making progress and maybe there is

fertile ground or do you think we're still going to default at this point is that your forecast? >> america's debt problem will become a debt crisis if we breach the debt limit. if we breach the debt limit, it's going to raise u.s. borrowing costs, which will cause us to become more in debt and not less it would compound the very debt problem that republicans are pretending to solve. and i find it alarming that i have colleagues in congress who are prepared to breach the debt limit. anyone willing to breach the debt limit cares as much about fiscal responsibility as an arsonist cares about fire safety as far as i'm concerned, the hypocrisy of debt limit brinkmanship in the name of fiscal responsibility is so glaringly obvious, it should not be taken seriously >> i'm not sure what you're saying you know the political realities, congressman, there has been a bill passed to raise the debt ceiling >> well, that bill cannot pass

the senate >> a clean deal can't pass the senate either. >> look, the most fiscally respo responsible outcome is to raise the debt ceiling but the president might have no choice but to invoke the 5th amendment. >> you're looking me straight in the face and saying the house is not raising the debt ceiling if the senate and the president get together and work out something with the house, which has passed a bill to raise the debt ceiling, that will happen so if it doesn't happen, it's because the senate and the house aren't getting together with speaker mccarthy to do it. it's not the house at this point that's pushing the country into default. it's not coming to the table like speaker pelosi went to the

speaker and it wouldn't be the worst thing in the world if we were to use the covid funds, get something done on permitting it not like it can't happen to raise the debt ceiling to accomplish something good for debt it's going to happen why resist it? >> because as far as i'm concerned, one of the most dangerous facts of american politics is the weaponization of the debt limit it's going to do more harm than good the best approach to managing the debt problem in the united states is a strong u.s. economy, it's long-term productivity, which is going to be put at risk by a breach of the debt limit. i simply disdegree agree with te promise of your question >> you do believe there are political realities and speaker mccarthy is not going to give you a clean debt limit and you can't pass it, democrats can't pass it themselves in the

senate those are the political realities of it. if you don't negotiate, then we will go to a default >> look, a solution -- speaker mccarthy's budget would cost 800,000 jobs by the end of 2024. a solution to the debt problem that stifles economic growth, that eviscerates the social safety net for our senior citizens and essential workers and our veterans, that's no solution at all. i represent -- >> we're talking about going back to 2022 levels of spending. i don't know if it's helpful to say it's going to eviscerate the social safety net and no one is saying that the bill as it exists today is going to be the bill that the senate and president are able to negotiate with the house it's going to be something that is palatable to the senate so that they can get through there and get the 43 republicans on board. it's going to be palatable through the house. everybody's going to get something. joe biden has done that in the

mast with that ceiling and budget negotiations. why is it so important to make a stand right now that could lead us to a default? >> i think there is agreement that we should set the country on a fiscally sustainable trajectory but that's a budgetary conversation the debt limit is not a budget the debt limit simply means in engaging in the fiscally responsible acts and honoring your obligations and keeping your word. what is at stake is the full faith and credit of the united states and if confidence in the united states is lost, it's going to do irreparable damage to the american economy. >> in the end don't you think there's going to be a negotiated raise, congressman don't you think that's going to be the outcome or do you think there's going to be a default? >> either there will be a negotiated outcome or an invocation of the 14th amendment. the 14th amendment is crystal

clear, that the validity of u.s. public debt shall not be questioned and we'll do whatever is necessary to avert the crisis >> okay, congressman it's a friday. we can at least agree on that, that it's a great day. we could all use a weekend it's supposed to be nice, too. i know we're in the same area here we're in agreement on that congressman, as i said, it's good to you have on as always. >> thank you next week's all about retail earnings reports when we come back, we'll get you an early read on consumer spending based on what oerth industries have seen stay tuned you're woatching "squawk box" o cnbc

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retailer results ramp up next week. we have a preview and a kwcheckn the american consumer. how are we doing, courtney >> i guess it depends on who you ask. early results from some have shown resilience despite elevated inflation and threat of recession but cracks are already forming. the xrt is underperforming the s&p 500 and foot traffic at the

big box retailers has fallen 8% annually from february a sign that shoppers may be spending less. in-store visits have been falling for more than a year at home depot underarmor said it drove prices for deal seeking shoppers which have gone walmart and tjx. but the grocery sector is facing a unique challenge this quarter as states end their emergency snap benefit allotments. snap recipients are buying fewer groceries and trading down to cut costs. walmart called the change in benefits a net negative in april. shares of walmart and target have moved in opposite directions since their last reports and that gap could narrow this time around if there's a significant change in

grocery sales, which walmart joan indexes in compared to target a boost from the recovery in china but called out caution in the united states. >> that's sort of a mixed bag here >> it is, it is. i want it to be a clear answer but it's never as clear as we really want it to be >> what are going to be some of the key things on the conference call in. >> absolutely you want to hear if consumers are doing a lot of trading down and in some cases we're seeing that and in some cases we're not. it's been interesting what we've heard from the banks they all thought the consumer was really strong. wynn called out the consumer as flush but some of the consumer companies were a little more cautious then coca-cola said consumers are taking on our price increases just fine. >> the interesting thing about retail earnings is the quarter ends a little bit later. we will see a little bit more of a fallout if there is fallout when it comes to the banking crisis when do a lot of these quarters end so we understand what kind of commentary we could be

getting. >> most retailers' calendars shift a little later to encapsulate all of january a lot will cover february, march and april for the most part. there's going to be some shifts here and there depending on the fiscal end they want to encapsulate january to finish out the holiday sales and that restarts. >> credit card spending at retailers versus cash could be very ind icative. >> exactly a lot of retailers like the buy now/pay later options because it gets people spending more. if they have to use buy now/pay later, what does that signal visa called out strong spending and experiences, travel. they did also call out strong spending in nondiscretionary, too. it's not all experiences >> buys week ahead for you >> another look at a volatile

week for regional banks. "squawk box" will be right back.

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box" on cnbc we're seconds away from new import price data. i had time the futures right now up -- actually moderated a little bit but up triple digits on the dow, the s&p and nasdaq there's the yield curve, rick santelli standing by at the cme in chicago rick, you have the numbers or you should right now >> well, i hope so, too, because i'm not a very good tap dancer import prices for the month of april expected to be up 0.3 of 1%, best of that by a tenth, up 0.4 of 1%. that is the best level, bloeliee it or not, going all the way back to may of last year any pressure under this point is probably not a bad thing if you strip out petroleum it moves to down 0.1 and that follows down 0.6

that was the biggest month-over-month drop we had since january of 2015, just for some context there and if you look at year over year, which i think are the most important on import prices, they were down 4.8% that follows down 4.6%, the biggest drop of may of 2020. on a month over month switching to export prices, expecting up 0.2, that's what we have, up 0.2. that's the best number since february we've seen some downward pressure there as well and finally if we look at export prices on a year-over-year basis, expected down 5 1/2%, down almost 6%, down 5.9% and last month's down 4.8 was revised at down 5.2. we're going to have to go way back on that one may of 2020 since we've had a year over year export price change on the down side of that

magnitude. joe, you see that yields really haven't moved all that much on this number. we're still at 341 what's notable there for 10s it's a split decision, up two on the day, three on the week two. 2-year notes hovering at 191 if we look at the biggest move this week, it would be the dollar index i know you're talking technically regarding the dollar index a little bit earlier, but it is up over a cent on the week, the best week i believe since february joe, back to you >> we're also talking technically about those yields, rick katie may or may not be right, katie stockton, but she was giving some possible -- some lows we could see in the 2 year and the 10-year. what do you think could get us to though lows it's so far away people say from the fed and reality right now, it could get even further away from reality what would cause that?

more angst in the banking sector >> you know, i think angst in the banking system of course can bring, you know, the quality assets back under the microscope, whether it's the dollar index and that's partially why it was fueled this week my own personal belief is if you really want to understand yields at this point, the best way to do that would be to pay very close hey tension to the yield curves, that massive move in 2s versus 10s on that inversion is starting to unwind as it unwinds, you're starting to see sellers in the -- excuse me, buyers in the 2-year, which could push that yield down a bit and you're now starting to see sellers in the 10s i agree with katie, anything under about 3 1/4 would change the 10-year universe i do think at these levels should we start to pop back above a close on any given week above 355 in a 10 without closing above 3 1/4 first, i

think we lock in the low rate structure in the long end and could fuel some of the long-end moves of slightly higher yields. >> you finished with the higher that was for me thanks, rick >> a slate of closely watched regional banks in the green. it's been a volatile week for the sector, especially pacwest it lost nearly a quarter of its value yesterday. joining us is christopher whalen great to have you with us. what's so shocking about the revelation yesterday was that just seven days before, pacwest said it did not experience any out of the ordinary deposit outflows so a lot changed in the span of seven days what was also interesting was that pac declined a lot and western alliance did not so there's a differentiation going on is that a good sign in it

crisis >> it's a different phase. the early phase was surprise and the fed reacted and provided financing. now we're dealing with cash flow problems inside the banks. i was with sheila bair last night. she said if they sold bonds, this wouldn't have happened. what's happening is the banks are all repricing. i think you could see funding costs in the banking sector double this quarter as they chase the treasury if you don't are your deposits rates up to 4% by the end of the quarter, then you don't want to stay in business, basic math, because your customers are asking you, even your business customers are saying you got pay me something if you want me to stay all these business customers have already set up accounts at chase in case they have to move. >> but going to 4% for a lot of these banks, that would just -- can they operate that way? >> they will lose money. >> yeah. >> and this is the key thing

i think we have to qualify fed governors as to whether they can do bond math if everybody bought security in covid and we move the base rate 5 1/2 points, everyone is insolvent, right it's basic math. we're going to continue to live with this and the street will pick on smaller banks with weaker funding that maybe are below book already once you get below half a book value, you're a target once your beta goes up to the point where you're twice j.p., these are boring stories, you don't talk about them much on "fast money," but you're losing too much, the pendulum goes back and forth and then the counterparties start backing away >> who is the actually winner, though jpmorgan gained i think like ten bucks since the banking crisis bank of america, on the other hand, sitting at two-year lows or so. >> yeah. >> who is actually winning out

of this? it seems that you could have easily moved your deposit to a jpmorgan or bank of america immediately in the aftermath of the collapses, but then just as easily moved that out to some firm offering 5% on something because jpmorgan is up.1%. >> or some of the broker dealers. >> exactly >> they are competing for funds and jpmorgan is competing. >> are they competing at 0.1%? >> no, but look at where their ts are rated out on the bulletin boards they're looking for money because they know that the runoff at the fed is real. every time a bond redeems, a deposit disappears they're going to have to look for funding. consider the difference between j.p., which managing their duration, very, very closely, tries to keep it short like a broker dealer. bank america keeps everything. one of the reasons that stock is not performing well is people know there's an embedded

duration problem at bank of america that's going to hurt earnings over time they own 2s and 2 1/2s but they're not going to sell. when their funding costs are 4, they're going to be losing money on those assets. it's like the s & l crisis all over again it really is >> that's a huge comparison. >> when paul volcker raised base rates for s & l -- banks didn't lend on real estate in the early 1980s. today real estate exposures, which is a duration aspect, right, that's variable, are throughout the system. everybody owns this exposure >> last time i spoke to you actually on "squawk box," you were long western alliance >> not anymore >> you're out. >> i was aaccumccumulating that because it's a mortgage play

all of those stocks are still going to be there when rates fall and mind you, look at penny mac. why? piece are starting to position for the eventual decline in rates when volumes come back >> so in the meantime, what is going to be the catalyst, the ballast for this sector to sort of firm up >> for the banks >> for the regional banks. >> to stay out of the headlines, as pacwest said and i think also at some point the fed has to relent >> say the fdic comes out and says blanket insurance for all deposits is that going to be anything is that going to be a catalyst >> if they did that, yes but the real issue is transaction deposits for business it's not the 250 limit for most depositors you don't need to deal with that they're fine the problem is the business customers got payroll at a small bank who feels antsy and says i

better put this in a fund. >> so is carry still short >> i think all of the small banks are targets. let's say western alliance dodges a bullet. what do we talk about then we start talking about ally and other banks that fund in the market as opposed to off core deposits do you think the fed will ignore that the asymmetry of their policy is they think they can do a conventional tightening with fed fund and ignore the $9 trillion they bought. no, they should have done both >> chris, thank you. >> my pleasure have a great day >> you, too. >> don't want to think about all that i told you i'm glad you were doing that interview i just watched kind of in awe. look at what's coming on monday, paul tudor jones will be interviewed by another guy with

three names. we'll be back. that's what's coming up and we'll be right back. you're a rock star. you are a rock star. no more calling co-workers rock stars. look, it's great that you use workday to transform your business. but it still doesn't make you a rock star. so unless you work with an actual rock star. hi, i'm ozwald. hello ozwald. pam, you are a rock- i wasn't going to say it. ♪♪ (water splashing) hey, dad... hum... what's the ocean like? ♪ are there animals living underwater? ♪ is the ocean warm? yeah, it can be very warm. ♪ you were made to remember some days forever. we were made to help you find the best way there. ♪

welcome back fu futures are positive across the board, s&p up about 14 it's flat for the week but we did see news around consumer and producer price inflation data over the past couple of days we're right now looking at the

fractional loss on inflation >> we heard comments for remarks at the european central bank in germany. >> in another businesses, soft bank may try to launch an ipo of chip designer arm in the u.s. as soon as september. bloomberg reports the share sale could raise as much as $10 billion. facebook parent meta announcing new a.i. powered services to help advertisers improve campaign results we'll talk to whatever the hell it is, budweiser including tools focused on texts and images companies got a chance to test what meta called its a.i. sand box at an event in new york. and tesla is recalling more than 1.1 million cars in china. the market regulator says the recall employs over-the-air

software updates on braking and this encompasses almost all of the cars that tesla has sold in china. big news, elon musk, tesla, twitter, he says he's picked a ceo to run twitter he tweeted yesterday afternoon he's already hired someone and that she will start in about six weeks. sources tell cnbc that musk is speaking with nbc universal, head of advertising linda yaccarino about taking that position and we've reached out to yaccarino as well as nbc universal, cnbc's parent company and nbcu owner, comcast. now to talk more about this news, let's bring in our own julia borstin. >> my sources close to the situation tell me that they are

in advanced talks with elon musk to be the new ceo of twitter we are awaiting a comment, official news from any related parties. the timing here is so interesting and particularly challenging for nbc universal, given the fact that nbc universal is hosting its up front on monday morning at 10:30 a.m. eastern it's going to be in new york linda yaccarino usually runs the show she is the voice for advertising for nbc universal. under her per view, joe, she has grown the universal ad business, really invested in its reach, they put ads in target adds, not just in the linear tv and peacock but have embedded adds, including twitter. there's a longstanding partnership between twitter and nbc universal. she's really invested in targeting and built this huge business bigger than any of the other media giants and it would

certainly be a big coupe for elon musk given her strong relationship with advertisers. >> she's much loved around here. and, you know, people get opportunities. i don't know the details but i would wish her well. everybody loves her. right? julie, you know her as well i'm sure >> yeah, very well liked yeah, very well liked. i've worked with her on moderating various panels and things to me what's most interesting is the relationship she's forged with these brands and in so many ways really positioned nbc universal not just in terms of advertising but also having the targeting and measurement capabilities that the social platforms had. so she really took nbc universal from being a linear ad business to really build up the digital part of the ad business and the keeping here really is that reach. they have this one platform. so it will be interesting to see

how this all plays out in addition, there is the cahn advertising festival in june she typically has a very big presence there along with universal, cnbc's parent company she has a deep bench of executives that work with her. i'm sure we'll see a lot of them on stage monday either along with her or without her. as elon musk manages twitter and the fact that twitter has seen concern from advertisers, i think she would be somebody who could really shore up those relationships with advertisers and really build -- complement elon musk. if she's focusing on the product, she'd be the one who could build out the ad business. >> i remember feeling sort of not awe struck but envy when she interviewed elon we'd love to have him come in and sit down on "squawk box" and i don't know whether that's when

they developed such rapport where this could happen. i'm sure it didn't hurt, right >> so about a month ago -- elon musk has been making these efforts to strengthen his relationship with the ad community, nbc universal and twitter have had this content advertising partnership. think back to all the times that the olympics are putting clips on twitter they have had this longstanding relationship which they had been working to continue and to strengthen so linda yaccarino did interview him about a month ago. they were one of the largest ad conglomerates earlier this woke. so they were together at this conference in napa certainly they would have interacted there so they were clearly in touch and we'll see as this plays out whether there's an announcement, whether we could hear something more today, elon musk certainly

likes to tweet out this news so i'm watching his twitter to see what kind of announcements we hear from him they were definitely in touch and it seems like that interaction they had, that interview they had in florida could have strengthened the relationship >> i think they share a fervor r for first amendment, and free speech as well, which you would imagine -- >> yeah, and that was something that came up in florida, yeah. >> yeah. >> in that interview they did in florida, yaccarino said she was impressed by and supported his commitment to free speech on the twitter platform. >> she's a very well-known, high-profile female executive obviously with a huge job. i don't know, this might be a whole new level when you think about it in terms of visibility and everything else, even though it's a private company now but, i mean, anybody, if she may love it here, might be -- she may bleed nbc blue, whatever you want to call it. when you get an offer like it i

think you have to think about it, right, julia >> yeah, i mean, certainly, the twitter job is a big one, and a challenging one, and the question, of course, is how much elon musk will still be involved in the day-to-day, and how much their roles would be complimentary. but we'll be watching for news, joe, certainly fascinating, of course, involving our parent company. >> exactly and then monday, monday -- which is coming up, should be interesting, thanks, julia. what to watch ahead of the opening ball on wall street. the futures right now, they're still up a little, triple digits, 30 on the nasdaq, 13 on the s&p. and another programming note, join us monday when we'll be speaking with two, not one, but two federal reserve bank presidents, atlanta's raphael bostic, and chicago's austin goolsbee stay tuned, you're watching "squawk box" on cnbc

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check out the shares of icon enterprises, if you would,

icahn's holding company operating a buyback, equaling almost 27% of its shares, after losing more than a third of its value. that followed a negative report from short seller hindenberg research always love that name for a short seller regulatory filings, the $500 million buyback marks the first time icahn's company has adopted a share program in 1987. over an hour to tgo, openin bell the dow is down eight of the past nine. let's talk more about the markets now with the global management the index level, the vix level in the markets, elise, but you say that every day clients are getting a lot more worried about the debt ceiling showdown. >> definitely. we are getting questions on the

debt ceiling in every meeting we're doing. you're seeing the nervousness reflected in markets one of the charts we created this morning showed that one-year credit default swaps for the united states are priced higher than brazil, mexico and greece but at the end of the day our base case is still that this debt ceiling gets resolved before the "x" date but nonetheless we're offering clients ideas and ways to hedge the potential event risk, like adding to gold exposure, et cetera but for now it's stay the course, doesn't change our conviction in things like core fixed income. >> so gold is the hedge. i mean, would you do, you know, something in volatility since it's so low? would you use the vix as a hedge as well? it seems really underpriced considering the risks out there in the markets. >> so we've been doing a lot of things on the volatility side, offering clients many ways to either put volatility on their side or play the potential for ongoing volatility within this range that we've been seeing, given our view that that could persist over the course of the

next year. but there are also a lot of things to suggest that this market is, you know, continuing to be supported and that maybe the debt ceiling is the thing that's putting that downward pressure once this gets resolved maybe you actually see a little bit of relief rally and get the index to close above 4,200. >> the markets have been supported by, you know, top holdings in technology, elyse, with the view that the -- the popular view, i would say, that tech is sort of defensive in this sort of era of the debt ceiling showdown as well as the banking crisis do you hold that view as well? >> yeah, i think a lot of investors are going back to what they know, and what worked over the course of the prior decade but i would also note that beyond just the leadership we've seen from tech, i think the market is kind of holding onto that q1 earnings season that ended up being a lot better than expected you know, if you think about the details we saw in the first quarter gdp report you're continuing to see resilience from the consumer, for now we don't have a lot of evidence that that's going to deteriorate

really quickly even as we look towards earnings reports coming from the consumer oriented companies next week we're eager to see if that resilience persisted through the month of april. >> you may have better returns of the consumer, credit card level at jp morgan at least but we've got retail earnings coming out next month, and our retail reporter was just noting we're going to have the data through the end of april we've got a pretty good read on the consumer there in terms of the realtime reaction to the banking crisis anything that will change your mind about the consumer? >> i think the biggest thing is watching the health of the labor market the last payrolls report we got was softer than, you know, the three-month trailing average but, all of the anecdotes you're hearing from corporate executives over the course of this earnings season don't necessarily suggest that we're due for a big unwind in the labor market in the immediate months ahead that said, our base case is still that in the second half of this year, between all of the tightening credit conditions,

the overall slowdown in economic growth, you might see some corporate management teams make moves to contain cost, and one of the natural ways to do so would be to pursue something like layoffs, that's the key thing that could hamper the consumer. >> and just quickly, elyse, i'm curious, we got fed speak, michelle bowman saying that basically that she sees another hike being appropriate and i'm wondering, does that matter, in terms of your view, the markets for the next year, if the fed goes another 25, or doesn't? >> not necessarily i think this is more about the 12-month forward view at this point. i think fed officials have to, you know, demonstrate that they're keeping that proverbial hammer in their hand, although that doesn't mean they have to strike the inflationary nail and i'm using a reference that bern bernanke used before the global financial crisis when you look at the inflation data the headline figure has been cooling for ten consecutive months

first time we've seen that in over a century lots of underlying components that that downtrend could continue our base case is that the fed is done with this rate hiking cycle and probably will start cutting maybe by the fourth quarter or the first half of next year, depending on what happens with economic data coming >> elyse, thanks so much, have a great weekend. >> thank you. >> you need to know where the market is, you can see it down there on the bottom. i'm not going to -- i'm going to say good-bye to you. plans, 87 degrees today. going to stay right here and do fast money. >> no, no, "squawk on the street" is up next ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. banks get some relief from thursday's pressure, optimism about the debt ceiling as well even as that white house meeting was postponed in the next week macro picture, those talks delayed, a fed grch says more hikes might, in fact, be