we'll save you >> all right, have a wonderful weekend, everybody we will be back here with you next week. right now, though, it's just about time to get over to "squawk on the street. we're going to talk for just another second or two so we don't give them a heart attack and toss to them early bye, everybody have a great weekend "squawk on the street" begins right now. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange heading into the weekend with a boatload of news powell is on deck. options expiration we'll be looking for debt ceiling news on sunday futures holding up on this best week for the s&p since march our road map begins with rally mode s&p, nasdaq eyeing the biggest weekly gain in several weeks big tech leading the way, apple and alphabet, highest levels in over a year. plus disney ups the ante in that feud with florida governor

ron desantis and there are some struggles in retail. shares of foot locker are down sharply after the company missed its first quarter numbers and lowered its outlook. we're going to begin with the news that broke a few moments ago and that is morgan stanley's james gorman planning to step down as ceo and assume an executive chairman role in the next 12 months we have been talking during the break, guys, about the strategic changes he brought but also some generational change here in financials >> i think that james gorman will be known as the man who said, we're not going to get in trouble with the government anymore. we're going to run a different kind of company. we're going to run an critadvisy company, and we're doing this in part because it's more lucrative and in part because we are not going the have the episodic up and down earnings that we've seen from other firms, including goldman-sachs. >> it has gone very well under mr. gorman's leadership, no doubt about it, when you take a

look at the performance of the stock versus goldman-sachs, morgan stanley gets a higher multiple i thought we'd take a look there. that puts it in perspective, doesn't it it is large deals, of course, whether it was etrade or eton vance, but the continued focus on wealth management, and gorman is not going anywhere for a while, will step up to executive chair. will be 65 years old >> a young 65. >> and announced this -- that this was the plan at the company's annual meeting for sometime, they have been setting up sort of potential successors, and andy saperstein, ted pick, two of the names people have heard. we'll see. but a change of leadership seems to be coming within the next year or so at a firms that applauded for the way it's been run under mr. gorman, and that change, to a certain extent, in strategy that you discussed, jim. >> when the brokers got in trouble, and of course, we're speaking of washington, james

said, this isn't going to be what's going to happen to us we're going to cut some businesses that others think are terrific and that have been historic to us, because we're not going to be a company that is called down to washington and it succeeded his company had far fewer incidences, and i think he changed the focus of the way wall street should be done, brought morgan stanley, interestingly, brought more back to the way the old jpmorgan was run pre-glass-steagall, the split, which was, we're going to advise the wealthiest, the big companies. we're going to become the trusted team to go to, and he also did something very interesting. he went with younger too and you could see that in the ads. he kind of decided, we're going to get them early. this is the opposite of what goldman did. goldman kind of was high net worth, and then went down to people who would -- i would regard as never would have

walked into goldman. morgan stanley decided to go after people, for instance, he made an acquisition to work on getting people who were ipo companies. >> right >> brilliant >> right >> and people who got stock right from the beginning wow. go >> yeah. >> meantime, jim, also the tip of the spear on some cultural issues return to work comes to mind and the move to trim some banker head count around the world. >> 3,000 took the hit before he let his successor have to deal with it i have had -- i've come -- this is a big position for my travel trust. we've come quite close to him. he was on -- i think he was on last on our show, and there's a quality about this man that has been sorely lacking on wall street humility when you speak to him, he has not forgotten that he did not come from wealth he's not forgotten that it's

blessed to have this job he's pure joy. and i say that because most aren't and he changed -- look, i applied for a job at morgan stanley. i got a job at morgan stanley in 1982 >> you didn't get a job at morgan stanley >> i did >> you got an offer. >> i got an offer. i thought it was, candidly, too snooty now, i look at the two, and i think, snooty? that's not a word that comes to mind with morgan stanley >> by the way, it's not as though they still don't do important business in fixed income currency and commodities and there are always setbacks. they were not in the kenvue ipo last week. very surprising. >> they were in the twitter. >> yes, they're still -- i think they're still sitting on a good amount of commitment there to the $13 billion that was raised from any number of banks >> they said to me, don't worry about it >> they have said consistently, do not worry about it. >> he mentioned "the princess

bride. >> by the way, if you're just catching up on the news, this is what gorman said at the meeting. take a listen. >> the specific timing of the ceo transition has not been determined, but it is the board's and my expectation that it will occur at some point in the next 12 months that is the current expectation in the absence of a major change in the external environment. >> and now we got the jpm investor day on monday, and we'll see whether or not -- >> oh no >> -- there's discussion >> real quick, although he did hold out major change in the external environment, meaning if things were to get crazy again or if there was to be a crisis, most likely you keep the old guy in >> right >> sorry jamie never what >> i happen to -- i've gotten very old-school and avuncular in my age i don't want jamie to go i think he's doing a damn good job. >> it's like you're going to be the last -- the oldest man in every room you go into

>> stop it >> sorry >> you can imagine, i never thought i would say it >> that's how i feel about you >> can we have a real -- he happens to be a real banker. i've been there when he's opened branches, okay >> not too long ago. >> and i filmed him last time, and unfortunately, jamie's often given to words that i guess he got, like, michael ruben in philadelphia when you're in philadelphia, maybe you speak like rocky or something. but i couldn't use most of his opening statements but he's a local guy he's a local banker who also is in washington and is a great statesperson, and i like him >> i know. listen -- >> incredible fastball >> grew up in queens >> and he throws a great fastball >> oh, please. gosh >> i'm sorry, i was out of line with that. >> yeah, you were. but also a queens boy like me. but meanwhile, he will be -- if gorman does step down within the next year and jamie is still in

that role, he's already the longest serving of all the major financial services company ceos and will continue most likely to be brian moynihan has been in his job a long time at bank of america. >> when you go out, you have these longevity in tech companies, but only founders >> yeah. typically founders hang around >> you've got benioff. he's there it's his company jensen huang, it's his company >> zuckerberg. >> it's his company. >> yes, it is. although larry and sergei are not real -- i mean, larry's involved, but -- >> do you think junius is rolling over in his grave because of jamie junius morgan? >> i don't know. >> junius morgan was someone who said, basically, i don't need to speak to anyone, because i am the most important person in banking. not in america, but the world. no one had even heard of the firm, but that was the attitude of jpmorgan. and it served them well during the panic of '07

we forget these -- the 37-year -- the incredible war between france and prussia where jpmorgan stepped in and said, listen, we'll finance france >> good to have somebody here at the desk who lived through them all. >> that must have been crazy, jim. >> yeah, was it? >> i sided with the french >> yeah. >> you know? it was the sixth in moray. >> we're going to be hearing about moves in world war i from him. the schlifen plan. how was that >> i call it ipres >> meantime, we'll get activity today. event of the morning is definitely going to be powell at 11:00 a.m. eastern time, and we'll talk about whether or not he, jim, either echos what he said untiin the presser, meanin that tweak to foreign guidance was meaningful, or if he backs up logan and now bullard, who's

talking about insurance on rate hikes. >> do you sense there's any tension between powell and yellen, yellen being this international forget who wants a great affinity for europe and what he may be doing is saying, you know what? we're going our own way. we're not going to inflate remember, the europeans, they got to inflate if they have a slowdown we're not inflating here, and i think that's very important to note, that powell is very much on his own i don't think that powell is sitting there talking with yellen >> said the other day, we don't have to move in tandem with the americans at all >> isn't that something? it's a very big change >> meanwhile, you got australia pausing, mexico yesterday pausing. so, a central bank -- there's been some fracturing in the trajectory >> and i think it's worth noting they're not speaking in one voice. the mexican peso has been red-hot. mexican economy is down a little, but look out our trading partners in north america could be diverging from

us too >> you think so? >> look, i think, mexico says, you know what? we're a growing economy, and we're second class we're being treated second class. our country's policy has -- is rather radical, which is that we've got to create as many jobs in mexico as possible so we do not have a border problem. >> right although, frankly, many of the people coming through mexico are not mexican. >> they're not mexican do you know that more immigrants we have had in the last year than we had in the last five years? >> yeah. >> it's quite a surge. >> the right kind, you mean? the kind that feeds the labor force. >> yes >> not illegal immigration >> no, no, the kind that you would argue, if you're jay powell, secretly, could we please have -- the only thing we're going to get this thing to not inflate and have a strong economy is to have a bigger pool of labor because it's the denominator. i've been impressed by the way powell's trying to handle this

he's got people that are put out. he's got reporters that they speak to there's very little that is not known, and we went radically toward a much higher possibility of a rate hike in june without any real roiling of the stock market >> so far, yeah. so far >> i mean, 40% odds of 25 in june as of how >> isn't that incredible >> although today, jim, bank of america, once again, sell 4,200. a.i. in what they're calling a baby bubble. >> bank of america,let get moynihan on the phone. we just had a downtick in consumer spend there's no baby bubble what there is, is the difficulty of evaluation. for instance, let's take a company that i have told investors in my club to own, don't sell the only one other than apple that i have ever felt like this, which is nvidia. now, nvidia reports next week. they report on wednesday

i think it's going to be incredible what are you supposed to do with the stock that'salready up 116 if there's really good news? will it sell off from good news? i got to tell you -- >> what's the multiple now, jim? >> 70. >> 70 times this year? >> right but you know that this stock sold at a hundred times earnings and then it turned out to be 16 times earnings in the period of 2012 to 2016 it ended up selling at like nine times earnings if you look back. >> what would they have to say for the stock to go higher at this point >> they have to tell you their actual h-100 orders. which, apparently, are not like anything we have ever seen >> can they increase production of the h-100 >> well, taiwan semi >> is it really about the capacity of taiwan semi? that's it? >> i don't know who else >> do we have to get morris chang? >> morris chang. >> he doesn't run it anymore

he's 92 years old. >> it's his company. i don't want to talk about the dependence of taiwan here, because you know, the line's pretty clear about taiwan. never mind >> you don't have to read between the lines. >> i loved the interview i loved the interview. >> there were some definite memorable moments. >> it was an amazing pitch right down -- there i go again there is, without a doubt -- come on. >> it's okay we'll watch my failure >> we know about one thing, which is that you can't get h-100 chips, even if you're one of the largest industrial companies in the world, and you're begging begging for chips. begging. >> it's going to be a big call >> yeah. when we come back, we'll talk disney upping the ante in the feud with the florida governor as they pull some development projects and close a hotel. we'll see if the bulls can hold 4,200, and we'llget to foot locker, deere, oxy, gm and a lo more

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shadowbox thing. i've talked to a lot of people about this, and i think this is difficult because it's -- maybe you got a pass here, iger, this is a chapek problem, chapek idea, so you can cancel it whether there was a fight with desantis or not. >> it was a decision made by chapek, in part, to cut jocosts, to move jobs out of california into florida, and now they're reversing that, but they are, as you say, in the midst of cutting jobs overall >> you know, are they cutting the right jobs by the way, do you think this floating of the espn streaming is really the answer to your linear -- well, not to your -- >> yeah, you're referring to a "journal" story in which they say there's an internal plan i think they've got a name for it, in which they will launch an espn streaming not espn+, but espn streaming service. not a surprise to anyone who's

been listening, of course. the question is really one of timing there was a downgrade today of disney by macquarie. citing the continued deterioration of linear networks we've talked a lot about it overall, and it continues. in fact bs it seems to be quickening in terms of pace, so that is a key question the question has always been, when do you make the move, not if, carl when do you decide that now the audience available to espn in terms of getting nine bucks a share from people, including people who don't even watch the program. >> jpmorgan's template right now is summer of '24, which others argue is a little early, jim >> yeah. i think here's what they're thinking if they closed everything, other than movies, they would be worth more

i think there's this albatross, and they got to figure out what to do. let's go to hurst, by the way, steve schwartz what is steve schwartz thinking? why don't we go to steve hurst has a nice position. >> 20% of espn still people sometimes forget. >> mooeantime, you're dealing wh a writing union strike, and maybe multiple strikes, and you have senators like the one from new mexico, who tweeted, hey, you're always welcome here, disney, which feeds right into your master plan >> he must be a "squawk on the street" viewer, the senator. >> i have that option. it's on 300,000 acres, on the road between austin and denver, which is the hottest corridor. i gave this to them on a cramer platter, a blue plate special, at a dinner. and it was talked about and actually, i think, one point green lighted. not unlike my plan to have unity

software do -- to have unity do fantasy of each player, all the skill players. that was another green lighted one that i pulled back >> you have the option on hundreds of thousands of acres in new mexico. >> i went on the website there were 300,000 for sale. i put in a bid i put in a bid i dropped it when i realized that i was going to -- >> you going to cause an earthquake what are you, lex luthor >> it turned out there was a lot of oil on the land >> we'll get the countdown to the opening bell rkity liear applause as the new yo cpoce department rings the opening bell

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couple more green arrows after the highest close of the year. right at 4,198 we'll see what we get at the opening. in the meantime, catch us any time, anywhere, just listen to and follow the "squawk on the street: opening bell" podcast.

and i remember kind of thinking like, "oh my gosh, i think we could be sisters." because i think we looked... yes. right. yeah. and i don't think at that time- i think you're the one to tell me that we had the same birthday. yes. it's really unbelievable when you think about it, because it's been, like, really over 20 years that you were my mother and father's banker, you became my banker and now fran is in her third year of college and you're her banker. it's so unbelievable because i'm just 20 years old. [laughing]

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the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. all right, we got three minutes before we wrap up trading here at the new york stock exchange for the week. let's get to a "mad dash." let's talk a little bit deere, second quarter net income $2.86 billion, net sales gain of 34%. >> so, there have been a couple things that have been going on crop prices have not been that good the fertilizer companies have really been crushed, so people came into this quarter thinking deere was going to miss. not only did they not miss, precision agriculture was good the standout that i find was in what no one thought would be good, which was construction and forestry, which was up 20% this is the beginning, i think, of the infrastructure that's been coming into america remember, according to the

infrastructure czar, only about $150 billion has been spent. it's starting. and the money is coming to deere. the read-through here is to another hated company that my travel trust owns, which is caterpillar. i think the money's finally coming people worry >> where are we on multiples here i look at a market cap of about $110 billion on deere. they're going to do as much as $9.5 billion in net income so, we're talking pretty low multiple here. low double digits. >> as i said, people felt this was going to be a miss the stock had been weak. it was at 12 times earnings. by the way, just to get the whole lay of the land here, this whole group is selling at -- the capital equipment, lot of these are selling at not the semi cap but are selling around 12 times. and what that says to me is that the -- when people talk about a bubble, what they should be thinking is, well, you know what it's unfair that some of these tech companies sell at, you know, 40 times earnings when you have a quality company like

deere selling at 12 i'm not going to disagree with that, but i think it's the quality company like deere that's valued too cheaply, not that there's a horrendous double this quarter was very good the precision ag, by the way, which is something i first learned of from cathie wood and her fund, is real. >> precision ag. is it precision railroading? >> i think union pacific's going to get it. >> explain very quickly what you're talking about >> you don't need a person behind the wheel it's very hard to find farmhands. >> these are autonomous -- >> autonomous driving. and it's here. there are others who say that they have autonomous, the best autonomous, and i find that as arrogant as they might be, this is the one that has the best autonomous but then again, not really dealing with black ice or pedestrians or -- but it works congratulations to deere for really pulling it off. it's a great company

>> let's get to the opening bell here in the cnbc realtime exchange at the big board, it is the nypd commissioner sewell accompanied by family members who have lost loved ones in the line of duty our appreciation goes out to the police force here in new york city over at the nasdaq, the pepsico asian network. we fill in here, a little bit of green to start 4,204, jim, and we've talked about what a sentiment ceiling this has been for the bulls over the last few months. >> there's so many people who are thinking privately, when you get off the desk, you know what? we are in a moment where some -- a gentleman out in california said we're in an iphone moment, speaking of jensen huang, and everybody since then has gone nuts i come back at it a different way. i think that when i speak with companies, they all say, hey, look, we're working on this, because it is that important

we will not be left behind i think it's more of a moment, not iphone, because really, that was just apple game, set, match i think it's a little bit more like the microprocessor and the realization that the mainframe could be shrunk to a pc. and that everybody just says, you know what? we better start addressing and writing for the pc, because then you can say, well, that was just microsoft. but i'm saying we now have this technology that you have to write for, and apple has to write for it everybody has to write for it. hp has to write for it >> yeah. >> because it's no code. it's just, you speak right now, siri -- >> every day, there are developments in a.i. that are worth noting, i think. in part today, there's been a lot of stories about meta and what they're doing but also the different tack that they took in terms of releasing llama, which, by the way, had already -- so, you know, you've got this -- the weights. i mean, musk referred to the weights. basically, the mathematical or the algorithm is already out

there based on the large language model that they already did the computing on >> right >> that takes a lot of problems away for those who want to write the apps based on it and/or create things. and we've been saying, this is going to be the home only of those enormously wealthy companies that can afford the computing power, but not if you put it out there in the way that meta, at least, did to some extent >> that's very true they opened it up. when i was speaking with jensen last, in california, i said, well, who are the adopters who are the people -- it was all the usual suspects, and then he said, mark zuckerberg. and i was a little taken by surprise, because jensen is someone who's about the environment. he's about eliminating waste he's about kind of, i would say, a person of great conviviality you saw that this week with the ford interview but the essence of facebook is

combat and what he said to me was, look, there's more to it than that, and that he talks to zuckerberg regularly, and i think that zuckerberg didn't even know where it was going, but just felt it was something he had to do >> we also, when we talk about this idea of regulation around it, when you release something in an open source manner that has that kind of -- that then allows the entire -- anybody at home to start, who's got expertise, to start building on it -- >> well, david -- >> this thing is completely out. musk said the other day to me as well, the idea of a pause, i just signed on to this thing i never thought they'd really pause. >> how about the musk part where he talked about the change in google it went the opposite that was a very powerful moment. >> yes he and larry page don't see eye-to-eye is what he said >> i don't think i want to get between those two. >> no. musk would not, in any way, really give us a sense as to what he sees in terms of ex-a.i. obviously coming back to the

belief that tesla has as powerful a.i. as any other company that's using it for a different purpose, namely autonomy for its vehicles. >> i felt bad that mary barra and gm had done so much with autonomy there in phoenix, texas, san francisco, and it doesn't really -- they -- some of them didn't even get in the conversation >> i don't know about that i mean, today, it's about the silverado ev, which gm says will get 450 miles on a full range. >> that's very interesting >> so, that's gotten some attention in the auto space today. >> when my wife drove the hummer, you know, she happens to be a great driver. she loves to drive and there were so many "you go, girls" in the streets of miami boca i think it's just a statement, but there's just not enough of them it's boutique. the hummer is boutique right now. the f-150 lightning is not boutique >> and then the question, again, i got tesla on the brain for

obvious reasons, is the cybertruck, which you think will be boutique. >> i saw your picture in front of the cybertruck. it was like you were bam-bam and it was in front of the flintstone mobile. i don't want in that thing >> it had a very nice interior >> today, wells comes out and says, s&ps have done great on these a.i. names it's ignoring what's happening to consumer trends we know what target said we even know what walmart and hd said, and now we have foot locker >> well, i think that the consumer is doing what the consumer's supposed to be doing, if you're having a radical amount of tightening the consumer -- you know what? when you talk to the consumer, they say, jim, are you worried about the commercial real estate everything's reverberating when you go through what people aren't buying, remember, they're not buying a new home because they can't get the -- no one wants to give up their mortgage. they're doing refurbishing they're tepid on clothes

they're buying a lot of food, big deal now, my travel trust took a small position in foot locker, and the reason we did -- i'll just give it to you. i memorized the numbers when mary dillon took over ulta, you had a run, but only after she took things down to begin with you had a huge move down when she took over. >> i thought they had a big move up in the stock. >> everybody likes mary dillon >> this is a horrible quarter. >> it's horrible i know it's horrible but let's get with this. in the week with the guidance, here's what happened the day after she did this when she joined ulta, did the same thing. said, look, things aren't good i don't know what to do. but i've got a plan. don't worry. listen to me this stock fell 20.5% from $118 to $93 you tell me this is -- this is mary dillon part two

bigger than ever i would like to sit down with her. kidding. >> are you saying, sandbag or not? i think she's saying, sales declined meaningfully. >> they lost a quarter of their market cap >> she bought a lot of stock ulta playbook is, i think, in force. she has to get rid of champs the quarter was -- look, i'm not saying the quarter is a good one. it is heavily shorted, about 20% shorted. i'm just saying if you go back, and the reason why we took a place holder position and now are indeed going to buy foot locker after we listened to sara's interview, unless that interview, mary dillon says, i quit, is because the next -- the next price that you got ulta over the course of the generational move that she had was you got not a double, not a triple, not a quintuple. you got a move that was from 100 to about 400

so, i'm with mary. >> got it. guys, i wanted to offer a little update on a company we've been talking about a bit lately catalin. >> it's up >> it's up incapable, somehow, of reporting its earnings it came into our universe a little bit because it was a takeover candidate for a while there was a lot of enthusiasm around it, and then it just plummeted because they delayed earnings still waiting. we thought we'd get it today, their fiscal third quarter earnings we didn't, but we did get a business update, and now the market is reacting positively, because they significantly reduced their expectation of sales from -- had been 4.63 to $4.88 billion. it is now 4.25 to $4.35 billion for this fiscal year they also now are telling us as well, adjusted earnings guidance range of $187 million to $228 million prior expectations, 567 to

$648 million but i guess the market was expecting even worse >> yeah, it was. >> so, the fact that you've got these numbers now, even though you do not have the actual earnings, as we thought we would, is giving some sense of relief this is a company that does -- you're a big pharma company, you outsource your manufacturing of your drugs to this company of course, it raises the larger question, if they can't even get their stuff together in terms of their own financials to report a quarter, how are is thathey goi get it enough together to manufacture drugs? >> they're in such a key position i would not want to go in front of the fda and say, we thought about our incredibly important life-saving drugs, and we gave it right to catalent >> the company that can't report a quarter, but somehow they're going to be fine with manufacturing our drugs. >> emerging bio. maybe we go to emerging bio. that's a pharma joke >> pharma junk joke. got it >> really quick, jim, we saw oxy on that list there as buffett adds another $200 million on a

day where oil's trying to recover. >> there are a lot of people, including me, because we just made an oil buy for our travel trust, thinking this is it the reason we say, this is it, is we feel from the g7 that it looks like russia can't produce more i know that iran is producing, and i know venezuela is back but i do think that this is the level, spr, boy, the amount they took out of the spr is rather incredible that did depress the price of oil here the only red flag is that the china economy is just stalled out entirely and that -- david, what is going on there with the middle class in china what is happening? >> i'm no -- >> look at that alibaba number >> yeah. i'm no expert on china what can i tell you? i can only talk to people who i think at least have some sort of a view -- >> can you get them on the phone? >> who jack ma? >> elon. he's got -- >> elon's view is better than

mine, that's for sure. yeah >> sure is >> but jim, the question there continues to be -- >> the neo is selling well >> byd is doing very well at the low end in terms of pricing, but the question continues to be, from xi, i think, what is more important, the security of the state or enhancing the ability of companies to continue to grow it seems to be more on the security side. >> yes, it does. what i'm surprised is that this was when mao went -- just was -- everyone was joining the military you had to join the 8th army in order to build bridges, and we haven't seen that yet. we haven't seen the dramatic move or a move to say, listen, let capitalism bloom there's nothing. there's just no plan and yet, xi, once he got president -- once he became president for life, what does he do, take a break i mean, he's more needed at this end of covid, i think, they weren't ready for it i don't know what's happened,

but when starbucks says it might be minus three for the quarter, starbucks. >> plus you got the g-7 timing is not an accident, and the quad meeting's going to be today -- sorry, saturday, in japan, rather than australia >> is that -- i know there's a lot of things at work here, and i know that the most recent numbers in construction are -- i'm just going to call them bad in china obviousl obviously, the price of copper has been a barometer for china >> it's been falling >> yeah. >> by the way, tesla's first peek above the 50-day since, i don't know, probably beginning of april, which makes me think of david's interview, which also makes me think of his banner week, which makes me think of yesterday's pitch. >> yeah. yesterday was so wonderful, other than when i actually took the mound. just a great day thanks to -- first of all, thanks to all my colleagues for being there. i didn't get a chance to see everybody. my friends and to the mets organization steve cohen, of course, letting

me actually do that. the big mistake here was getting up on the mound. that's my son there, and i threw a horrible pitch horrible >> david, i was on the mound >> horrible. we were on the sideline before that, and i was throwing fine. but thanks to him for actually -- >> talk about how throwing it is >> i got up on the mound i shouldn't have -- no excuses but i should not have gotten on the mound. i should have just thrown in front of the mound >> that's what you're supposed to do. >> i had not practiced it's the one thing i used to be able to do is actually throw a baseball, and i didn't even do it >> you were like 50 cent >> no. it wasn't. it's not going to make anybody's blooper reel >> generally, the take is it's better than any of the actual mets have thrown this year, so you got that >> hey, you know what? here's the thing >> who's that kid? >> that's my boy >> that kid looks like a phenom. that kid's a phenom.

>> he can catch a football >> did cohen sign him? >> no. but todd did think i was throwing with a mets player. >> did you use a four-seam or a three-seam >> whatever it was, it didn't work i was fine here, and i got up on that darn mound, and i didn't adjust for the vertical -- verticality, and i had not practiced from the mound so, there you go it was a great day by the way, most importantly, winning streak winning streak there's me talking to vientos, just joined. great rookie we're going to have >> i was out with the guys i said, wasn't the interview with musk great? my friend turns to me and goes, yeah, but did you see the pitch? i said, come on. don't you dare compare the two >> you know, i'm hoping -- even though cohen told me, if you bounce it, you're done, i'm hoping that given we won and

we've begun what i expect will be a very significant winning streak now, he'll bring me back. please don't show it again thank you. i can't watch it again >> i understand todd has the ball >> todd caught a foul ball >> oh, very nice >> yeah. >> that's fantastic. >> caught a foul ball. >> did he take it to a little kid? >> give it to a little kid >> he shoved a little kid out of the way, but it was fine it was a great -- just a great day. >> i used to get them all the time >> major league baseball, thank you. the game was like two hours and 20 minutes it was great >> isn't that great? >> i always talk about the day piazza came down to the floor, and we said, what's happened to the game what's happening to attendance he's like, people don't take picnics anymore. who has time for a picnic? >> it used to be -- it really helps. it moves the game along. you look up, like, whoa, fifth inning >> true. and z-scaler keeps going higher. >> and z-scaler keeps going higher >> up another 70 cents >> got that going for us too >> abbott labs is breaking out

i'm sorry. >> by the way, i'm happy to move on i can't even watch that. the one thing i used to be able to do is throw a baseball, and now i can't even do that >> man in the arena. >> that's right. >> rang the bell yesterday from that man arena are you like teddy roosevelt at all? >> no, no. that guy took a bullet and kept talking. >> no doubt about it >> 4,212, so we got that going for us >> where's mr. wilson? >> that's a good question. the other, though, is the two-year at 4.25%. 27 basis points this week. >> my friends who are wine connoisseurs last night, i said, what kind are you buying everyone said, we're buying the 30-day i said, 30-day wine, that doesn't age. 30-day piece of paper. a lot of people are looking at that and saying, you know what why not? >> that's an interesting question because there's discussion today about, all right, say you get a resolution, what happens to the drain on the back of that

>> so great. i say it comes in the market >> you do? >> yes, i do i say to every one of you with your 5.3, you're going to be in there buying stocks, and you're going to be in there with the s&p, because that -- you're going to -- you're going to look back and think, why did i feel so comfortable for one month earning 5.3% that's my feeling. i'm not backing off. >> is that going to go into tech >> it's s&p. i think people are a little frightened of tech i think they're frightened but remember, you know, i know i don't want to go too much into it when we all are able to -- our lives are going to change. now, in david's view, it's skynet and there's no arnold, and we all die, which i'm against i'm against the, we're all going to die i save that for billy in "the predator." in my view, we are all going to have much better lives we are going to be able to say -- last night, somebody recommended a book to me and i wanted to say, could you

please -- i wanted that. that's the new world you don't even have to type it in >> now that open a.i. is making chatgpt for iphone, you literally will be able to do that >> yes that will be amazing it will be amazing you want a dj? you want this guy? >> it's going to be great. it's going to be great >> did he just turn you? >> no, not at all. i was going to go on and continue to be sarcastic until humanity is, i mean, when they reach that level of intelligence that's beyond us, do you really think they're going to look at us and go, they're helpful? we want to have them around? no no >> don't say these things. >> they'll be like, what are we doing? >> someone told me -- you know caigo, the dj? >> no. >> okay, well, someone told me, listen, jim, just say that you want caigo, you could get caigo, and i said, i thought that was an illness turns out to be the number one

d.j. in the country. d.j. saul is -- i think he's at our conference next week >> excellent i look forward to seeing him >> and i am a big believer and positive about a.i i'm not going to let david talk me into the "we're all going to die. i'm just not going there no no that could kill our numbers. >> as we go to break, let's check bonds. that two-year got to 4.25% dow is up 52 we are above 4,200 with some sectors playing. in fact, everything except consumer discretionary and tech. don't go away. >> announcer: is bond report is

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interesting as well, not far off that list despite a good quarter and decent guidance, memory remains soft dow up 66. we're on powell watch and stop trading with jim go wind turbines. go gorgeous reliable grid. go emerson software. go science people. go breakthrough meds and safe science. go space age welds for super silent cars. go big. or go home. from software that delivers new cures at warp speed, to technology that makes clean energy reliable, emerson innovation helps make the world healthier, safer, smarter and more sustainable. go boldly. emerson.

let's get a friday edition of jim and stop trading. >> i think wendy's is under valued and benefits from union expansion, they need the strong international growth that's been coming but investments in digital business this is the first company that has embraced chat. they have recognized maybe they can save on employees and having, yes, at the drive-through, which i think starbucks is going to have to fold to, the ability to have the voice be not a human and this is going to be the beginning of what i think is the real industrial revolution because we haven't seen the ability -- i don't know if powell is paying attention -- the ability of the machines to take over the men and women. it's very big and that's the next leg we have to cover who is making

money. >> you had them on "mad" last week how about tonight is this. >> i have adco, a good complement to deere, although they don't have the construction side but they have a read on -- it's been a good stock -- great read on world and hunger and food remember 13% of the world's food has been taken off the table by ukraine, which is one of the reasons you have so much food inflation in the supermarket these places are incredible. they have aisles and there's food and then they have cereal i'll take you. >> go sometime. >> it's incredible. >> innovation. it's amazing. >> we'll see you at 6:00 "mad money" tonight. holding at 4210. with powell on deck in an hour sg each other rock stars? 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.

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it's the end of the road dom. 1-800-376-4376. boom. this is your last ride. your pain has just begun. good friday morning. welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla and david faber, live as always for you from post nine of the new york stock exchange take a look at stocks, they're higher again today coming off of a 2% rally over the last two days and continued follow through up a third of 1% on the

s&p 500 tracking for an up week for stocks the best in a few weeks. we're 30 minutes into the trading session. some big movers that we are watching for you right now we're going to start with foot locker, plunging more than 20% after a big earnings miss and lower guidance slaring the outlook. much more on that stock including an interview with mary dillon the ceo shares of deere moving higher after smashing estimates the farm equipment maker raising its outlook thanks to strong demand and shares of bloom energy rallied, hydrogen producer from overweight to neutral, did trim its price target but sees 45% upside on this stock from here nice reaction up 6.5%. we're counting down to jay powell's comments less than an hour from now. it will be important to listen to his tone because we've seen a market move this week. there's now more than 40% chance that june is a hike and i think

the common thread from the fed speak lately is that june is a live meeting it doesn't mean they're going to raise rates. there's a new thing in the markets where people are talking about instead of pause, it may be a skip. they're leaning, they kind of want to pause and see the damage they've done, but maybe the fed speak is hinting at we skip and then we raise again in july because there is -- there is also a discernible difference in what we're hearing i think yesterday was a prime example where we got two messages from fed officials, jefferson and logan, and they were different logan, seeing lori logan of dallas fed seemed in the camp of we're not there yet, it's not good enough to pause and jefferson much more in the camp of we've seen a lot of weakness and could pause. that tells me maybe there's a compromise there, a skip, instead of a pause. >> a wait. isn't it a pause why wouldn't it be -- you're pausing a little bit. >> because the pause implies

they're done they're done raising rates. >> then they should use a different word. >> well, it's it's market's word really. >> how about done instead of a pause. when i pause the tv it's because i'm going to come back and turn it on again. >> exactly. >> but i think pause for the market means pause and then cut. >> okay. >> that's sort of where we were and now we're sort of maybe we pause and hike, maybe we don't pause at all in june we're going to get the may jobs and inflation numbers still. didn't get much from bill dudley from the fed as far as market moving commentary. what i'm looking for from powell he's speaking to bernanke, not sure how much he will get into tell graphing june odds. the market will read into that on the data. like the data this week has not been terrible and the gdp tracking for next quarter is still pretty strong. what we've seen is higher treasury yields, the 10-year the highest since march, 2-year

yield has made a big move higher as well this week. that's the one closely correlated with interest rate expectations. >> the data has been firm, but the commentary out of micro, especially retail, has not been. nobody is talking about m 2 growth collapsing. no one is talking about the credit crunch. bofa out a couple moments ago, it's been ten weeks since the stress emerged in the banking sector and a wide range of indicators confirm that shock is primarily contained. so far so good they say. >> if that's the case that has to figure into thinking about the impact on the overall economy. we hear from many regional banks they are making it difficult to borrow we know that commercial real estate is a concern, certainly offices, and, you know, not just in big metro areas but around the country. it may be a concern that's going to play out over a long period of time and not necessarily damage the banks but it could, sara, still lead to more

stringent lending requirements and less credit. >> the important point this week is the stabilization in the share prices of the kre. you know i always highlight this, got the fed balance sheet data and stress still lingers in the banking system it turns out the fed has combined $96.1 billion of loans outstanding to banks last week and that was a little bit higher than the week before up from 92.4 we're well off the peak we saw in march during the acute phase of this crisis $164.8 billion was borrowed then but it was a new high in the bank term funding program, the btf, which is the new -- >> the new - >> right that they put in. >> facility. >> still pushing about collateral being widened in terms of what the banks can use and just different things that they feel could be made to make it easier to use that program. and then, of course, there's a larger question as well still of what do you have to pay to keep depositors who flee to money markets or treasuries or what

not for far higher rates than they can get at their banks, not because they're worried about their deposits from the sense of the bank collapse, but they want to get a return and what kind of pressure is that putting on the earnings speaking of banks, one of the larger investment banks we follow and wealth managers, morgan stanley, had some fairly important news this morning, the company's annual meeting james gorman, its long-time ceo, said that within the next year, roughly, his expectation, he will step down as the company's ceo. he will remain as executive chairman, and it does appear now to set up a fight or at least a contest for his job. he'll be 65 years old at that time, between ted pick, lee sapperstein. to take that job, it could be distracting for some period of time, to have three warring camps perhaps at the bank that he has run extremely well, many

would say, judging from the stock price over the last ten years, for example, out performance against the likes of its key rival goldman sachs. moving in a different direction. willing or not willing, investors willing to pay a higher multiple for those earnings at morgan stanley because of the belief that they are more likely to reoccur, being focused on the markets prior to his ascension look at that that's stark. >> the fact he's going to stay on as executive chairman to provide stability, i think, is a key message for investors and i wonder the fact that he says it's going to happen in the next 12 months, if that is a signal, you do that when you feel good about the outlook, right, about not just morgan stanley, but, you know, if you saw a hurricane coming, i don't know that you would announce in 12 months -- >> no. although he did make a comment i believe, i can't quote it directly, but that if current conditions sustain in other words, the idea being if we were to find ourselves in a crisis it might not be a move

that they make within the next year or in the 12 months let's get over to leslie picker and get more on this, including i'm curious, leslie, in terms of the early vetting who will get the job internally at morgan stanley. >> yeah. i mean, this has been kind of a three-headed horse for a while now. these three gentlemen have been speculated as those to be heir apparent to james gorman you know, you've got some different backgrounds here, simcowitz, background in capital markets, running investment management ted pick is running their -- the business that basically does sales and trading and investment banking, that's their institutional securities group, and sapperstein in charge of wealth management which has become a behemoth in morgan stanley over the past several years or so. i've been talking to sources this morning to get a sense. i think it's still these three candidates that, you know, are being considered and, you know, it will be interested to see as

the months progress, kind of if any of them come more to the tr forefront from here. gorman talked about the shareholder meeting and feels optimistic about morgan stanley. the real news today within the next 12 months we could see a new ceo at morgan stanley. >> got it. thank you. leslie picker with perspective there. >> foot locker is getting slammed on fourth quarter results. the shoe retailers missing on the top and bottom lines, same-store sales a lot weaker than people were expecting the company cutting its full year guidance. i spoked to mary dillon and asked her what happened here >> we announced our first quarter earnings and lowered our guidance for sales and earnings for the year, really driven by two factors. softer customer demand than anticipated and elevated

inventories. i want to reiterate, though, i am extremely confident about the lace up plan that we unveiled to investors in march about six months into my men tour here, designed to drive long-term sustainable growth for foot locker and we believe that by simplifying the business, leveraging our assets and investing in the right capabilities, we'll be able to drive that growth. we're in this great growth category, and foot locker is at the center of sneaker culture. i see chutes starting to show up tougher start to the year than we anticipated softer customer demand as well as elevated inventory. while that is disappointing, we're adjusting to that reality, but remain very engaged and energized about the future we'll take the short-term action we need, but it doesn't deter us from our long-term belief and strategies and targets >> i think the market was willing to forgive a weaker quarter as you had been talking about, the softness, we saw the tax refunds come in late, but

ga guidance is really what surprised everyone, and lower margins as well. has it surprised you that -- the shift in trends? >> i would say at the end of the day, the consumer is showing some weakness and i think we've seen this building for a while our customers come out for key shopping occasions and we're delivering great exciting opportunities for them on those. we saw softening last year but the customer was resilient for back to school and for holiday, but as we've come into this year, step back, pressure on discretionary spending and household budgets is intense inflation, while abating, is still high when you think about things you have to pay for, like rent, like gas, like food, it leaves less dollars available for discretionary. we've seen increase and uptick in the use of credit there's less covid benefits available. while we were hopeful as we got further into the year and past the lower tax refund we would see a tick up, really, the demand has been sort of soft having said that, like i said,

people are coming out for great shopping occasions we just had a great mother's day where we elevated our entire women's business in a jordan metro launch last weekend that had a lot of excitement and demand what we're trying to do is be realistic and think the pressure will continue for some time. we don't know when it won't. we need to address the fact that our inventories are elevated we came into the year 30% higher thinking with our sales plan that was manageable, but we need to get more aggressive and that's to your margin question about providing discounts and promotions to clear that inventory so we can get in a better position for the latter part of the year. >> how long is that going to take >> you know, i wish i had my crystal ball today, but i don't. we're trying to make the best call that we can we're managing expenses and preserving our investment into the future because we see a bright, bright future ahead. like i said, disappointing of course nobody wants to lower guidance but we're trying to give the best call we can.

we see in our lace up plan a lot of early encouragement and improvement on many things we're doing to improve our store portfolio, digital experience, our loyalty program, et cetera. >> that was a small piece of the interview with mary dillon we'll play a lot more in the next hour, 11:00 a.m. hour of "squawk on the street" including how she's going to turn it around and how long this is going to take. i asked her about nike in particular, which is, obviously, their biggest -- the biggest presence in a foot locker, how much was nike, versus other brands she got into it a little bit because we're seeing the impact. nike down 3.6% all of retail is down. i think one point really important to consider here with foot locker, and why we saw less bad results overall with other retailers, foot locker's customer, 47% of them are lower income they're exposed to the consumer in america that is hurting the most right now. >> that's why they specifically mentioned tax refunds which have come in light this year as

everybody understand, but that gets back to your question about the guidance this time was so important. they took a butcher knife to this. >> few things happening. consumer softness, after they saw the lower refund, it got worse. clearly they're on the wrong side of inventory up 25% at the end of the quarter they have to do deep markdowns that's going to hit earnings and they're trying to refresh and change the product mix, change the stores. she's in the middle of this transformation i do think the market reacting down 26%, it was a big surprise given the update in march which is a lot more positive we get into a lot more of the stuff. >> the stock went up on that update rather dramatically. they had so little visibility i guess to be confident in the update they were giving in march. >> consumer. consumer changes and consumer problems and they were optimistic again that things would come back a little stronger i think after the weaker tax refunds

it didn't happen so much. >> yeah. >> but this she will get questions about that and the credibility factor luckily she has that from ulta as cramer has been mentioned a lot, and quite a track record there and she's sticking with the view and the turnaround plan you'll hear a lot more about in the next hour. as we head to break here, our road map for the rest of the hour, a lot of cost cutting headlines from disney this morning. what it means for investors. >> plus, retail's shrinkage problem. shocking impact that theft is having on the bottom line and what retailers are trying to do about it. >> bitcoin has been on a tear this year as you if you wake up thinking about the market and want to make the right moves fast... get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen...

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disney, perhaps, upping the ante in its feud with ron desantis citing, quote, changing business conditions, scrapping plans for what would have been a billion dollar florida campus which would have employed 2,000 people disney pulling shows from its streaming service and closing its star wars attraction this september. joining us michael morris, he has a buy on the stock let's just start off on sort of this news, what's your reaction to it. was it more part of their cost-cutting plan overall or do you think it is a real response

specifically to sadesantis >> it's hard to mix anything with the political situation right now. disney is playing the long game here with respect to how they're structuring the business, and i think they already had pushback internally from the employee base on some of the move from the west coast to the east coast, and the most efficient and simplest path forward is to move on from that. >> what are expectations when it comes to cost-cutting overall? we cited a florida based hotel attraction, but where are they in terms of how much iger promised to take out, not just for the content budget, but overall operating? >> the company talked about cutting in excess of 5 billion of the business across content and a number of infrastructure and under performing sort of parts of the business. it's such a complex company as you know

i heard what your discussion on the business about an hour ago and agree with a lot of sentiment that you highlight we're looking across some things in parks, but mostly media and overhead right now as the areas where this company and probably most of the media industry at large has been overspending for the last decade with respect to serving their consumers and now is the time to start right sizing that and really, i think, the company is on a good path, but expectations for their ability to do that still remain high. >> yeah. across the board when it comes to let's call it old media, i hate to say that, given where i sit right now, but, you know, the decline of linear networks only seems to be increasing. we talk often here certainly about cord cutting which seems to actually be picking up speed, not sort of reaching some slow end. what are your expectations there and how much pressure is that putting on warner brothers, discovery, paramount, my parent

company, to cut costs when it comes to direct to consumer consuming so much of the cash flow. >> it's a great question the cord cutting in the first quarter this year was at the highest levels ever, both on a gross numbers basis over 2 million subscribers left the bundle in the first quarter of the year and on a percentage basis, right, so those high numbers are off a lower base i think the issue really, maybe we have a differentiated view here, is not about cutting costs to try to keep pace with this rate of decline, it's about an understanding that the business model has materially changed the days of charging the consumer for x content even though they only want y are in the past i think all of the media companies inclusive of disney and netflix, have to say, what is the core product that we're trying to serve the consumer, where can we be excellent, and then build a business from that.

i think disney is actually in a great place over the long term i think that the disney brand of content is unique for that i think the assets that they have in sports are very unique, though expensive and they need to figure that out general entertainment, they have a very healthy general entertainment business, but tlef to really make the decision if they want to compete with netflix and hbo in that space and not just have their general entertainment business tag along with the success of disney and espn. >> michael, the reports that governor desantis is about to announce he's running for president. is that going to be an overhang on disney stock in any way are you bracing for bad headlines? >> interesting question. you're just bringing it up to me right now. the way i think about it is that the governorship in florida is generally at most an eight-year cycle, so, you know, that's still several years for governor desantis if he were to leave earlier and pursue something else, i think

that's, you know, well within the realm of possibilities but the bottom line is i think disney is in this state for centuries to come and i think the change in the political dynamic could probably let some of these tensions come down a bit when it's not just maybe perhaps a more personally tied matter and it could be something that is tied to the health of the state economy, the growth opportunities for business in the state, and i think in the next governorship will probably move past this topic. >> yeah. as we like to say here, we shall see. michael, thank you appreciate it. >> thank you >> coming up after the break, the largest bitcoin conference in the world under way in miami. we're going to take you there live in a couple moments ♪ this is the all new, all electric lucid air. a car that goes as far as it does fast. as sleek as it is...

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i'm so curious what this conference looks like after the carnage in the industry? >> reporter: hey, good morning, sara yeah, the vibe here at bitcoin 2023 is a little different than last year at the height of the crypto craze in 2022 some 35,000 people descended on miami beach for the three-day event. now organizers tell me they expect more like 12,000. this is the first day open to the public yesterday industry leaders gathered to discuss the future of bitcoin and the larger ecosystem. david marcus, former president of paypal who spent four years trying to build out facebook's failed crypto offering, told me on stage, that he had decided to spent the rest of his life building on bitcoin and the lightening network to allow super fast transactions on bitcoin. one headwind, the price. bitcoin is up more than 60% this year but struggled with a larger crypto ecosystem thanks to the wave of bankruptcies and scandals last year when i chatted with the attendees, some of whom spent as

much as $20,000 to be here, they're not too worried they say that bitcoin future is looking bright i have a line of people behind me who want to ride this bull, so there's still very optimistic vibes on the ground. >> a metaphor there, riding the bull we saw someone jump on while you were talking thank you very much. after the break we check the with moody's chief economist mark zandi as we look to the fed chair speaking in the next hour which we'll take live for you. s&p holding on to a 0.3% gain. adding to gains we've seen this week we'll be right back.

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welcome back to "squawk on the street." i'm contessa brewer. here's your news update this hour ukrainian president volodymyr zelenskyy will appear in person at the g-7 summit in japan this weekend. other world leaders at the summit have already announced new sanctions against russia a senior ukrainian official says zelenskyy's physical presence is important to defend ukraine's interests. sellman rushdie made his first public appearance after being stabbed at a literary festival nine months ago the author received the centenarian courage award yesterday. he says it's nice to be back as opposed to not being back, which was also a possibility new york city's roosevelt hotel is opening its doors to migrants today mayor adams said the hotel eventually will provide as many as 1,000 rooms for migrants expected to arrive in coming weeks following the expiration of the pandemic-era policy title

42 new york city's facing growing pressure to expand its shelter system sara >> contessa, thank you checking in on the markets, just about an hour here into trading and looks like we're holding on to gains. as far as what's leading the s&p 500 right now, energy is near the top of the list today. that sector up 1.4%. health care, real estate, utilities, also some strength in the cyclical groups tied to the economy like materials, financials and industrials what's not working today, consumer discretionary big pressure on retail in part due to foot locker's very disappointing quarter and guidance raising concerns about further retail earnings to come in the next few weeks. investors are anxiously awaiting chair powell's speech at the top of the hour. our next guest says the economy remains remarkably resilient joining us is moody's chief economist mark zandi i feel like you've been calling for a fed pause, disappointed in the last hike, and now, you

know, we've gotten a bunch of stronger data than expected. does it make you rethink that position do you think they should be done >> oh, they should be done, yeah i mean, sara the key here is inflation and in my view, inflation is coming in, you know, consumer price inflation peaked at 9%-ish last summer we're at 5 i feel very confident that we could talk about why that inflation is going to be closer to 3 by the end of the year and close to the fed start next year a lot of uncertainty around that, but i feel as confident in that forecast at the current rate of interest than i have in a long time. no -- and, of course, there's a lot of other things going on, banking system still under a lot of stress, economy is slowing, recession risks are lie. add it up, i don't think there's another need for a rate increase not now. >> the market has been on board with that view and you get confusing data like from the

university of michigan, inflation expectations over the next five years, jumping to 3.2%, the highest we've seen in a while. >> yeah. you know, i don't put too much weight on the university of michigan survey, it's a small survey that jumps around all over the place if i'm going to pick a confidence survey to look at, it would be the consumer board survey that's rock solid, hasn't budged, feels like it's saying that economy is in pretty good shape, but, you know, doesn't need another rate increase inflation expectations broadly feel like they're coming in slowly but surely a straight line especially for consumers, it's going to take a while for them to truly believe that inflation is coming in because they've been through a lot over the past couple, three years. i wouldn't read too much into the university of michigan survey. >> why are you confident it's coming down to 3% when it's more than double where it should be on the target and fed officials don't seem as convinced as you do >> two reasons

one is the cost of housing services, which is a very large share of the inflation pie, particularly in the consumer price index, that is -- i feel this with a high degree of confidence, that is going to come in. we know that rents have gone flat to down in many parts of the country, a lot more supply hitting the market there's a record number of multifamily units in the pipeline going to completion and they will get completed and demand is weak because of the previous surge in rents. we have demand destruction households can't afford to buy a single family home or to rent. that means lower rents and that translates into lower cost of housing services in the next 6, 12 months. >> vehicle prices, really great news that came out of the last cpi report, consumer price index report, decline in new vehicle prices we've been waiting a long time for that finally getting enough production in japan and germany, the supply chains are getting back in order to producing more cars and that means more cars on dealer lots and weaker prices

and so that's the start of some consistent price declines here i think over the next six, nine months that's another big chunk of the pie, of the inflation pie. so those two things by themselves, sara, i think argue very strongly that inflation will come in here in a reasonable way into next. >> getting backed up by this new york fed paper where williams talks about our star and long-term structural inflation pressures and the idea that it's not impossible that we go back to an era of very low rates. >> did john say that i missed that. i haven't seen that. >> williams today. >> yeah. yeah you know, i'm sympathetic to that view. i do think that we've gotten rates back up in the post-pandemic period probably where we want them to remain long-term rate, 3.5, 4%, our star 2.5%, that would be ideal

hopefully that's where we stay here going forward but i agree, you know, hard to know, you know, whether it's going to go lower than that if we go back to the prepandemic world that we lived in before. very difficult to know. >> apollo had a notion today, mark, that basically said, we could see what they call a nonrecession recession and that is we printed a bunch of money, it changed asset prices, maybe didn't change the economy so to speak, and as you unwind it, the economy, again, won't change that much, but it its asset prices will revert what do you make of that idea? >> that's what we're observing house prices, commercial real estate values, stock prices, you know, of course, bond prices, all, you know, kind of skyward in the environment that we're in and now they seem to be reverting back to kind of more historical norms still a long way to go, you know, valuations are still pretty high across all asset

classes. i think we still have a lot of air justing to do, particularly in the commercial real estate market it feels like we have a lot more price weakness there dead ahead but it feels like we're moving in that direction. that does pose risks, you know once asset prices rise and start coming back in, that does create problems for bank lenders and owners of those assets they have to adjust to that. so far so good you know, things are kind of coming together reasonably well and the economy, again, seems to be weathering that storm, you know, reasonably gracefully. >> mark zandi, leave it there. thanks for weighing in today ahead of powell. >> sure thing. >> mark zandi from moody's. >> as we go to break check out leaders on the s&p for the week as we're right here around 4208. half hour, 20 minutes away from powell back in three.

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fans, please direct your attention to the pitcher's mound, honorary first pitch, david faber, a member of cnbc's "squawk on the street" and a life-long mets fan and queens native our catcher is his son jonathan faber. >> yesterday david got the chance to throw out the first pitch. what happened there? >> i got on the mound. i had not practiced on the mound. i had been throwing, my arm is fine everybody says don't -- and i just -- i didn't adjust frtsz verticality. >> 35-year-old t-ball game happening. >> don't take any -- i used to actually -- i mean, that's the one game i could play and now clearly from watching even my arm action there, what hell was that god. >> that was a little off center.

>> it was horrible. >> but still how cool of an experience. >> a great day. >> they won. >> they beat the best team in baseball, two games in a row and, so i mean, even that, even the angle there. that's for you. >> they're booing you. >> yeah. you can't bounce a pitch cohen told me don't bounce it. >> we'll just run this. >> run that. i can -- yeah, i know what i'm doing. i can catch the ball i used to be able -- again, it was disappointing, but the rest was great. our colleagues were there. everybody came out friends. it was so much fun thanks to the mets as well and my boy there great day. >> my 5-year-old son is a lefty and i think he can do better i'm kidding. >> i'm going to get another chance because we're going to go on a big winning streak and say it's because, you know - >> do it in the playoffs how about that. >> i'm going to come back in the postseason and throw strikes.

>> i don't know. on tuesday the "sports illustrated" models were throwing the pitch and that's when they started winning. >> don't get on the mound unless you've been practicing from the mound. that's my advice. >> good. >> good job anyway pretty epic. >> thanks. >> target raising eyebrows this week saying it has taken a more than $1 billion hit to profits since last year largely because of theft organized retail crime target isn't alone in its fight against this problem foot locker mentioned it courtney reagan has more on the story. what is happening here, courtney >> it's been happening for a long time and seems to be getting worse. walmart's cfo rainy told me organized retail crime is an issue bigger than just the retail industry. target is taking the step of quantifying loss from shrink being driven by this type of theft. home depot has been call out material levels of shrink since 2019 the quarter's biggest pressure on gross margin. dick's sporting goods, lowe's,

macy and ross stores have called out theft related shrink the national retail federation estimated shrink costs retailers $95 billion in 2021. that was $3.7 billion more than 2020 with 37% of that total or about $35 billion, from orc. now 71% of retailers surveyed by the loss prevention research council say orc has increased 81% report somewhat or much more violence associated with it. this week, new york city mayor adams said retail theft 44% last year over 2021 with repeat offenders responsible for a nearly third of all arrests. the median orc fencing operation handled about a quarter of a million dollars in stolen merchandise prior to being apprehended. adams says social media amplifies the issue and nearly half of offenders use online marketplaces to resell stolen goods. though peer-to-peer apps are

increasingly used. facebook ranks as the most problematic by retailers, ebay, offer up and amazon. now congress is trying to curtail the issue. the inform act requires on-line marketplaces to collect, verify and disseminate high marketplace seller information that starts at the end of june back over to you. >> appreciate that nice setup as we get into more discussion in retail with michael laser from ubs it's great to have you every retail snapshot is economy ca complicated and this has weather, tax refunds, the consumer mindset is foot locker a decent lens or not? >> i think the lens is that discretion nare narrowry retail is already in -- discretionary retail is already in a recession. we see that consistently in the reports that materialized this week, and it's likely to get worse before it gets better. in addition to all of those factors that you mentioned, there's going to be looming

headwinds in the months ahead. in august or september, those who have student debt are likely going to have to start to repay those loans. that alone can hit 7 to $8 billion hit to consumer spending per month. in addition, the best estimate we have is from the san francisco fed noted that excess consumer savings has fallen from a level of about $2.1 trillion at its peak to now $500 billion. that's likely to be exhausted as we get into the back half. year and those factors are going to put what is already a difficult situation for discretionary retail into an even further difficult spot >> so i know some of your favorites include walmart and dollar tree. is that on the notion that they're going to continue to get some audience from income levels higher than maybe history would suggest? >> that's right, david ulta, is in a good spot if only

because it's benefitting from a unique trend, really the micro influence trend, where you have folks on tiktok and reelz identifying new bute products driving innovation and uniqueness in this category that should do well independent of the macro economic backdrop. dollar tree, another really interesting story here that we like a lot it's at the right place at the right time because they help consumers stretch their budgets. plus there's new management team that's come in in the last few years, made copious amounts of investments in trying to improve the performance of this business, incremental shareholders from here can reap the benefits of those investments as the company harvests a return. those are two names that we're paying attention to next week and we think are compelling ideas. >> on the shrinkage issue,

michael, has it ever been worse for the industry if, in fact, there's progress made, is it going to lead to some unexpectedly more profitable quarters for some of these companies? >> david, hopefully my pitch right now is as good as your pitch was yesterday -- >> wow oh, mine was not good as i wanted it to be, but thank you. >> it was good the second issue on shrinkage worse than it's been and at some point this will be addressed in our view, either through collective action from the retail sector that puts pressure on municipalities to enforce the regulations greater than they are today. different actions that retailers will take to the store, put in technology to help prevent theft or third, if those two first things don't work, ultimately you and i as consumers are going to be paying the price for this because they're going to pass along the higher costs in the form of higher retails

eventually this will get worked out. it is an issue right now, but over the long term, this should find much more support. >> we will track the sector as more names roll in next week thanks so much. >> great to see you. and speaking of these issues, next hour, don't next hour don't miss more of foot locker ceo mary dillon. we touched on the theft problem and what they are doing about it it's the 11:00 a.m. hour stay with us thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back.

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let's pretend for a second that you didn't let down your entire family. what would that reality look like? well i guess i would've gotten us xfinity... and we'd have a better view. do you need mulch? what, we have a ton of mulch. recent fed data shows as asian-own businesses were able to get all the funding and credit needed to run their businesses kate rogers has a look at the new numbers and the lending gap. >> that fed data also showed asian owners were more likely to rely on their own funds for financial struggles and more likely to say access of capital was difficult. >> the bank wouldn't loan me money. it was difficult even, you know, finding -- finding other

resources. and ultimately came down to me, just putting in everything i had, borrowing a little bit from my parents and my brother, but we needed more >> renaissance, which serves low to moderate income communities and immigrant small business owners in new york since 2018 the group has provided 2,000 aapi members in $5 million loans and grants. bank funding also proved difficult. >> when you talk to about borrowing, they say, what kind of business are you in it's restaurant, high-risk business, so a lot of them don't want to give you that funding. >> the center for responsible lending is urging for disaggregated data so we can follow up and see how different minority groups are receiving f funding and how best to serve

them moving forward. >> we'll take a break as we await the fed chair coming up at the top of the hour. equities frozen in amber, 4208, although the bond market is getting antsy with the two-year, now 4.33 oman) with verizon's new myplan, i get exactly what i want. and only pay for what i need. (man) now i'm in charge... ...of my plan. (vo) introducing myplan from verizon. you get exactly what you want and only pay for what you need. and it all starts at just $30. it's your verizon. you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire there are some things that go better... together. 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. do you ever worry we'll live forever?

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welcome back we are moments away from fed chair powell delivering remarks on the economy let's get over to bob pisani and get a look at what the market action has been so far and what it is ahead of powell's remarks. >> we started very optimistic that maybe we were shifting into some of the cyclicals early on, the strength of deere, but that's been a tough call in the last hour or so. so, good news is, energy, materials, industrials, generally started stronger that would be a nice shift over the dominance of tech that we've seen tech is still flattish to slightly down. take a look at the cyclical group. deere started strong on terrific earnings and middle of the day has been drooping lower. caterpillar was much, much higher earlier as well ge was at a new high eaton was also positive. the big cyclical industrial names have started strong and weaker in the last hour or so. the issue is there's not a

chance to move into cyclicals. the difference is bond yields have been rising at the same time the stock market has been rising that may be signaling reduced odds of recession. it's not bad news. if you look at the s&p 500, it's finally broken out of that trading range we've been looking at for a long time this is the highs for the year right now. what we need is broader market participation. we've been whining about how the tech stocks have been dominating things how about getting some of those cyclicals moving you can see energy eog and and some of the other big energy names moving to the upside today. >> appreciate that important morning. welcome to another hour of "squawk on the street. we are set to see the fed chair, and bernanke as well markets holding cards close to the vest dow has been up 100 for most of the day and we've been hovering around 4,200

mike santoli, steve liesman with us sara, the question is whether he backs up his prior comments at the presser about that tweak to guidance being meaningful or leans into the lori logan and now bullard camp today. >> plus the fact of whether he's going to signal anything at all about the june meeting, given the fact we still have a key inflation and unemployment report for the month of may. a little bit of disagreement from the fed members about whether june really is a live meeting for an interest rate hike i think this comes against the back drop of a week where stocks rallied. importantly, stocks rallied as yields rose. we certainly saw that yield rise in the two-year yield, which is sensitive to fed rates the dollar rallied as well this week all signals that a lot of the data has been surprisingly better if you came into may expecting weak u.s. data and strong china data, it's pretty much been the opposite that's what's driven a lot of the dollar rally, mike what surprised peopl