it is april 19th, 2024 and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm andrew ross sorkin along with melissa lee joe and becky are off today. as we mentioned, breaking news overnight. israel carrying out a narrow strike against iran. it is assessing the effectiveness and damage caused. the action appears to be limited to avoid escalation. we saw the markets move down we are looking at the dow which is off 30 points it was worse before. nasdaq down 108 points s&p off 20 points. we will see how things moderate

here the dow fell 300 points on word of the attack, but we are modulating slightly. treasury yields and crude as well oil prices in just a moment. ten-year note at 4.58% >> the expected run to safety. >> the question is is this performative >> to show we are retaliating. >> the reaction in the commodities market the initial reaction was steep and then we pared the gains. crude is $82.57 the story is in brent which surged above $90 a barrel. we're back below the level right now. as for gold, 2$2,395

that is unchanged. bitcoin had the same reaction as we saw over the weekend with the initial strikes from iran. we had bitcoin now higher at 2.4% $64,882 as we await the halving which is expected over the weekend. let's get a live report from raf sanchez in tel aviv. raf, good morning. >> reporter: melissa, andrew, good morning for a week, the world has been waiting to see how israel would respond to the barrage of the iranian drones and missiles. we have an answer this morning and it doesn't appear at this moment that we are hurdling toward further escalation a source familiar with the situation tells me israel carried out a limited strike inside of iran in response to that attack. israeli officials reviewed the

damage the target was the military base near isfahan that is a couple of hours south of tehran. it is not clear if the attack was carried out with fighter aircraft with missiles and drones the u.s. did get at least a generalized heads up from the israelis that the strike was coming according to the source familiar with the situation. the u.s. making clear it was not dir directly involved in the attack. source s across the middle east were on alert in case the proxies were picking up action in the region. officials down playing the attack this morning with the iranian president speaking in last hour and made no mention of this whatsoever. iranian state media says the situation in isfahan is calm

the iranian military said explosions people heard in the early hours this morning were iranian air defense missiles the they are not pointing blame at the moment israel is not claiming responsibility or denying the at attack this is a measured diplomat ick approach they are giving space. that is what the u.s. and other countries had hoped would happen it is worth noting the israel military is not imposing restrictions on the residents here they are not bracing for retaliation. in the next hour, we are expecting to hear from secretary of state antony blinken who is speaking at a g7 meeting in it

italy. that is the first time we will hear from the biden administration since the attack. guys >> raf sanchez in tel aviv thank you. at home, we are watching former president trump's criminal trial five alternates remain to be picked trump blasting the case after the court adjourned saying the world is watching this new york scam shares of trump media jumping 26% in yesterday's session 17.3 million shares changing hands with the market cap at $4.5 billion after the 15% jump of stock on wednesday. tumbled and tumbled and regained some ground. obviously, not where it was at the beginning. >> not nearly. >> unclear what's moving it the

other way. >> right it was unclear what was moving it at all. >> it has been unclear the whole time. president biden's top economic adviser will make sure gas prices remain an ffffafforde lael brainard was asked about it she said there are things which have been done in the past and the white house would monitor gas prices would remain af affordability for the summer driving season. hyundai confirming to nubc news it paused advertising from elon musk's x platform the carmaker is speaking to x about brand safety to ensure the safety is addressed. the business operations confirmed the pause to nbc news and said the account that made the posts has been suspended because it violated x's policy

against abusive profiles. when we come back, more here on "squawk box." the response on the attack by israel on iran. and we will have the blowout stock report on netflix and what happens next. plus, the journal report saying beijing has ordered apple to remove messaging apps from the app store. th'somg rhtftat cinupig aer this >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. th. like your workplace benefits and retirement savings. voya helps you choose the right amounts without over or under investing.

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welcome back netflixruscrushed estimates in e first quarter. the company said it will stop reporting the subscriber numbers in 2025. that is the biggest headline here is greg peters last night on the call. >> each incremental member has a different business impact. all of that means is that h historical simple math is increasingly less accurate and capturing the state of the

business this change is motivated by wanting to focus on what we see are the key metrics that matter most to the business >> joining us now is jessica from boa okay, they beat the numbers. that's the great news. the market on the stock price goes down on the back of something about this >> exactly exactly. >> what do you think is happening here >> by them saying they will not give the sub numbers or arpo is the key metric the key kpi. not surprising the stock reacted negatively having said that, it doesn't change one thing about the growth trajectory or the growth drivers ahead. this is like the cable industry ten years ago. it is a very predictable and stable business with margin improvement. the benefit of advertising,

which is the high margin business, is going to kick in. >> why immediately move this way? you think people thought this was a bad sign >> a cover up or something declining? >> 270 million subs, not that they can't grow, they can. they are not hitting a limit right now. the growth will come from lower arpo markets l latin america or other markets greg said the themix of subs ist equal. >> there is something to it because they don't want to show the average revenue per user they want you to look at it holistically >> exactly to the extent that advertising should continue next year as they scale with the 65% of subs which are going to the ad tier means they are pricing it that way.

to scale up the platform means they have what advertisers want. >> one of the things they have been working on in the past year which created the subs is the idea of the password sharing piece. how much more of that do they have to mind >> again, it is hard to tell. >> was that the low-hanging fruit and now they are done? what percentage of the subscribers do we think are new subscribers or subscribers paying does it matter >> we don't know the option for password sharing crackdown is you become your own sub or extra member of the house which is driving revenue it is mixing the sub number. you see the revenue growth drivers. they have pricing power and advertising coming in. they have sub growth around the globe. >> is there a time period where

you will say these subscriber whose are paying subscribers are going to stick who knows if the newly paying subscribe ares are actually using the app and continue to pay for it >> right anyone who came in with password sharing, you don't have to market to them they he know the service they know what they are getting. the focus last night on the call was about engagement whether -- we know the shows we are watching also, they are adding live the boxing event this summer i'm sure they will add more sports games. they are also -- >> you are sure they will add more sports. they have been receipt not

adding sports. >> wwe and that programming. sports or entertainment sports there is a lot of chatter they will bid for nba and the in-season tournament which is moved to the beginning of wwe. i would not be surprised if golf or something else with a long-term rights >> let's go into the future for a second how many of the services do you feel in the end the american family is going to subscribe two? three? four one? >> i would say three-to-five. >> three to five >> three-to-five broadcast networks then fox came. >> it was free you didn't have to pay for it. >> groups. it was consoleidated to three-to-five groups

there will be bundles. you turn on your tv or device or whatever and netflix is the whole pay tv bundle and everything else is an addon. >> right now, your three are what >> my ten. i get everything. >> you get everything. if you have to get it down to three. >> i would say netflix that's a given probably the disney bundle >> with hulu >> yes >> and espn plus >> and then i believe max will look different in a year max warner bros. has the deepest library. max will be there. i know people say apple and amazon >> amazon, apple, peacock, paramount plus headline that sony may team up with apollo to get in on that.

>> good luck with that we'll see. >> good luck >> because sony is a japanese-owned entity. they cannot own cbs or cbs tv stations >> you have to split it up >> you have to break it up >> as you look at the chess pieces and we are sitting here 12 months from now, i don't know who the president is of the united states or the regulatory environment. do you think that all of these companies will still be independent? >> no. no you hit the nail on the head should nbc u and warner bros. discovery be one company it would be amaze ing if they were there is a lot of focus on that. that would be the powerhouse paramount will look different. >> is that your bet a year from now? you said you thought max was going to be the absolute number three. are they the absolute number three as an independent player or absolute number three with an

accommodation with somebody else >> independent player. they are ramping up dc universe. loo a lot is coming on max to say this in a year without the regulatory environment is really hard. >> i ask hard questions. >> as always >> jessica, thank you for coming on this morning. i appreciate it. that stock is up a little bit this morning i don't think that has anything to do with the other news. thanks. coming up, i'll show you what is moving in the markets and the attack on iran. and pga is set to report at the top of the hour. will have the interview with jon moeller when "squawk box" comes back i'm tasting it- or a night person. or a... people person. but he is an “i can solve this in 4 different ways” person. and that person... is impossible to replace.

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welcome back to "squawk box. if you are just waking up, the market is now down 143 points. we saw the dow off 300 points. nasdaq is 116 points i'll show you the treasury markets after the european markets as well. they have been live and you are looking at everything off .50% sometimes more this morning. it seems to be modulating at the moment let's flip the board and show treasury yields. ten-year note at 4.578%. oil here with wti crude at $82.50 gold and bitcoin as well gold at $2,396 bitcoin has moved up despite moving down when the attack went

the other way. $64,831. a little over 2% this morning. time for the executive edge. the amount of offices have surged with trillions in wealth deployed robert frank will tell us where the wealthy families are putting their money to work. >> melissa, the number of family offices in the world has triple theed since the pandemic there are 4,500 offices in the world. that is up from 1,300 in 2019. the family offices are inhouse firms for wealthy families worth $100 million or more total assets tops $6 trillion. family offices now accounts for a larger share of capital markets of hedge funds or private equity or hefunds. they are moving away from public equities the favorite allocation for this

year is private question and real estate and equity they are replacing those in many big deals. michael dell's family helped take endeavor private which was a $13 billion deal family offices replacing private equity in the oil and gas sector as investors are leaving that sector an number of them bought purewest for $1.8 billion. the favorite sectors are bio-tech, a.i. and health care this used to be a sleepy corner of finance which is now replacing a lot of traditional investors because it is patient capital. right now, it is available capital when banks are not lending and it is so expensive >> the regulatory burden is less than if you are a hedge fund that's the push here >> a lot of hedge funds became

family offices and part of that is the below a certain amount, you don't have to disclose the holdings there is a push for more of that especially as it is more important in the market. this is not a systemic risk, but important source of capital. all of wall street is trying to tap this with private equity and new family office groups >> you have to wonder, the more they move in equities and if that time comes and they become more of a force. hedge funds are a force. this corner of the market is bigger than hedge funds. >> that's right. >> you would think regular tors could look to require more disclosure of family offices >> the corporate transparent act requires them for the first time to register with the federal authorities their true beneficial owner that's a mild requirement, but it was a big burden for many

family offices because they think it is a slippery slope you start with the true owner and we want to know what you are holding and trading. especially after archegos, there was a push for transparency in the market especially with the big family offices which are $10 billion or $20 billion. >> robert, thank you >> thank you coming up on the other side of the break, foreign aid for israel front and center for congress after the strikes in iran overnight as we head to break, here is a look at yesterday's s&p 500 winners and losers >> announcer: executive edge is sponsored by at&t business next level moments need the next level network.

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good morning welcome back to "squawk box. we're live at the nasdaq market

site at times square global markets are responding on the limited attack by israel on iran the markets are modulating from where they were originally down 300 points on the dow originally now down 123 points. the nasdaq off 109 points. s&p 500 is off 20 points let's get to washington, d.c. where emily wilkins is right now. foreign aid to israel is front and center for u.s. congress and house speaker mike johnson making a push ahead of that before the weekend emily wilkins, good morning. >> andrew, congress working late last night we have a lot of news. the $95 billion foreign aid package and potential tiktok ban is set for a critical vote today in the house the package has faced stiff opposition from the group of hard lined republicans

you had a group of democrats on the panel joining the mainstream republicans to move this legislation forward overriding the objectives of hardline conservatives. this is extremely rare although democrats will vote for it in the end, but they never help with the process votes like the one we will see today which proved to be a stumbling block for republicans. it seems democrats are ready to make an exception and cross the aisle for ukraine. democrats need to help republicans to stay with the key vote to overcome the objections of the house freedom caucus on the package. particularly ukraine looming over the debate is the ouster of house speaker mike johnson. johnson said he is a war-time speaker this week and said the threats on the world stage are too critical to not address. >> this is not a game. this is not a joke we can't play politics with this we have to do the right thing.

i'm willing to take the hit for that >> the final vote on the foreign aid and tiktok package is expected to come on saturday johnson is taking a unique strategy one vote on ukraine and indo pacific and one on security measures and the tiktok bill that would give the company up to nearly a year to find a buyer. andrew, we'll keep a close eye to see what congress does there. >> emily, the separate slice of national security with the tiktok ban or tiktok for sale bill lives what could derail that effort? >> you have a couple of things in the piece a piece of legislation that would basically allow the u.s. to take seized russian assets and liquidate and use that money to assist ukraine. you have a number of sanction efforts on russia and china and

iran as well this issing something that johnson is pretty confident will pass the reason they are not taking one big vote and breaking it down to four and if you take four individually, you have enough to pass and you lump them together and then you have others who oppose to harm the bill this is one republican leaders is confident >> this is making the forced divestiture more likely. emily wilkins, thank you. this next story is not a forced dhivestiture >> there is a new report that china has ordered apple to remove the most popular chat mess knowmessaging apps like

whatsapp which was taken offline on friday. it was told to remove them because of security concerns they are obligated to follow th law. they can only be accessed through vpns to circumvent the chinese firewall, but commonly used the ban is in place. are you not supposed to use these things in the country. this is a formality. what triggered them to say take it off now >> you want to add kerosene to the tiktok fire? i imagine this is the talking point of the day if you are in washington, d.c. thinking about ex-communicating tiktok, you will ex-communicate tiktok faster because you will say look at what they did here. >> that is the tip of the iceberg of what china can do to u.s. business.

>> note and notice we is been debating what will has been to tiktok for a long time now publicly. >> yes. >> these guys put out a statement overnight that is just happening. meaning, in china, this is happening. there's no debate about whether apple should remove it no conversation. no nothing. >> of course not. >> just a different world. >> it is a different world we have to acknowledge that an investors have to acknowledge that if they do business in china. in the meantime, meta rolling out the free artificial intelligence assistant across the social media platforms this includes whatsapp now banned in china. in a video announcement, mark zuckerberg saying the assistant can answer questions and create animations and generate images a.i. was built on the largest large language model called llama 3. it is a competitor of chatgpt

and genemini mark zuckerberg says he believes meta a.i. is the most intelligent assistant you can freely use take a look. we are not taking a look at the video. we could chat with our bot or chat among ourselves about the story. by the way, llama 3 is pretty good it is probably not as good, to be straight with you, and claude 3, by anthropic, is outrageous. >> i'm a neo -- you speak of things i have no knowledge of. >> you will use it and it is for a free tool you can use and it is pretty great. i happen to be a proud owner and

maybe i'll wear them next week of the ray bans they sell. meta has partnered with ray ban for a pair of sunglasses there are cameras in the glasses. speakers in the tips of the glasses. you can talk to the glasses. you can ask a question you can say, what kind of coffee is this. just looking at it and the camera is looking at the coffee. >> how are you looking at results? >> you are not it is talking to you if i were to say this a perfect world, i would wear the glasses looking at you and say -- who is this person? the camera would look at you and it would say it's melissa lee. i don't believe it does that for people, but it could help you if you were wearing the glasses and you are in times square and a

tourist and you say tell me what i'm looking at here. it will start talking to you if you want to fix the toilet, you can say what am i supposed to do here some of the times, it does it properly some of the times, it doesn't. >> if you can afford these glasses, you are not fixing your own toilet. >> the glasses are 299$299 d not bad. >> joe is back next week >> yeah. >> that will be fun. coming up, global markets reacting to the israel attack on iran we dig into the crude prices next get the squawk pod on your favorite pcaodst app and listen to hus anytime we'll be right back. ested fixed me suite, backed by over 145 years of risk experience, helps investors meet their goals.

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welcome back to "squawk box. if you are just waking up, be global markets are responding to the attack on iran joining us right now is john stavridis, former supreme leader how limited this strike really was and how performative it may be and if this will escalate things, admiral. what do you think? >> limited strike. very muted and carefully calibrated are the phrasing that come to my mind, andrew. israel had a basket of options early in the week. they could have done nothing, pursued diplomacy or used cyber ore gone big with the nuclear facilities they choose something in the middle, but on the small-scale

side attack launched at isfahan think chicago in the u.s. context. very small packages of explosives from what we can see. certainly drones, not manned aircraft all intended to say to the iranians that we can come in your house when we want. we're not going to blow it up today. i think that message was delivered and i'll close with this, both capitals, jerusalem and ttehran are downplaying this we are in a high probable moment of the state on state violence diminishing that shadow of war continues. >> the most important piece sounds like if tehran is not talking about this as an escalation, that this really

does feel it is moderated, you talk about the shadow of war continuing what does it look like >> three places to watch one is proxies that's particularly hezbollah, hamas is cornered in gaza. hezbollah to the north of israel 100,000 missiles available watch for that to, perhaps, ramp up a bit again, iranians will not unleash them on israel at this point they are trying to deescalate an second, watc what happens at sea. houthi is that looking like a spike and finally cyber. look for the escalation in the world of cyber gl >> do you think the u.s. will be roped into this, admiral >> i do not.

president biden needs a full-blown war in the middle east he needs a war like he needs a hole in the head in an election year he has done everything and done a pretty good job and the administration has of avoiding being dragged into this. secondly, at this stage of things, israel can handle itself and protect itself it's got its hands full. the key thing from the israeli political perspective is what is happening in washington with the aid bill to israel and ukraine we will know if that passes this weekend. >> okay. admiral, thank you for joining us and helping us understand what is taking place and it sounds like this is on the better side of good news after the attack thank you. >> thank you now to the energy markets. price of crude jumped 3% before coming back down right now, wti is down .50%. brent is down by .70%.

joining us on the news line is john kilduff john, great to you have with us. we he e never reached in the st the highs like we e had on frid with brent what does this action tell you >> it tells me that -- good morning -- that the energy market has been through this before last night was very scary. we are $4 a barrel off the high from last night mostly because the first target was identified early on almost immediately was isfahan. the admiral mentioned it was a large city and the iran nuclear site the oil market is the thing to worry about with the israeli response that would engender a response by iran again and get us off to the races. it is almost hard to get your head around the fact lately or

any more how high the bar is in the middle east for all-out war to breakout and oil supplies to be impacted. when you are talking about iran and everybody is focussing on the state of hormuz, rightly so, iran relies on that so much. the theater here has been just off the charts and the oil market reaction, last week, melissa, is when the nerves were frayed in the market there was heavy buying all throughout the week, particularly in the middle of the week ahead of the iranian attack again, the market was able to exhale and over the years, really, the decades now, these attacks come and they are dealt with and handled diplomatically. you don't lose any barrels of oil. that's what you have to be careful about if you are trying to react to this and hedge yourself in the event risk strategy >> the markets have been immune

to this. i didn't feel there was much of a reaction initially because iran did seize a tanker in the strait of hormuz john, is that an open-ended question that there could be more disruption like that? that would actually directly impact the oil market if there is a perceived risk in sending ships through the strait >> no doubt. that is still on the board i think in terms of blocking it, melissa, that is off the board as you are seeing with the red sea situation, if that bad neighborhood would come to pass in and around the strait of hormuz with iranian activity and the nation flag fvessels they carry and then israeli ownership of the vessel and contents, then things would perk up and the oil market would focus like a laser beam on that because the tankers avoid the region and stop

transporting oil to avoid direct conflict or interaction with the iranian naval forces we're back in the soup then. >> for now, it looks okay. john, thank you. >> it does thanks coming up on the other side of the break, p&g set to report. thankfully. >> john kilduff. coming up on the other side of this, procter & gamble set to rtpo we're going to bring you the numbers with jon moeller in a little bit "squawk box" coming right back >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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welcome back to "squawk box. markets shrugging off last night's attack by israel on iran we watched the dow move lower, 300 points down. now it seems to have modulated

150 points, nasdaq off 122 points, the s&p 500 off by 25 points what are you seeing among investors that are playing, dare i say, in the futures markets or internationally or even what you think the movements of bitcoin, which actually have moved up, during this period >> yeah, you know, i will start with bitcoin, andrew i think it is really interesting to see we have been hearing that it is a storage of value i think everybody -- a place to turn to when there are times of trouble. i should restate that. and maybe this is a little bit of a proving moment for them, as this war or whatever we want to call it continues to escalate and we see more happen there as you said, when this first news first came out last night, the s&p 500 futures were down over 80 points the amount that we cut that overnight really is amazing as more details have come out the one thing i would like to point out to investors, though, is that if you look at the vix this morning, still below 20

vix, to me, over 20, is where you start to get a little bit more concerned and so, you know, we're about 19 and a quarter as we go on the air here but, you know, again, this is not a time for panic but i do think it is a warning for investors also to really make sure that they have the positions on they want, you saw last night how quickly the narrative can change with how quickly we move down you still do have bonds up, you know, over a point this morning. so i wouldn't say it is an all calm, but i would say that the markets are a bit more reasonable approach, if you will, to what went on last night. >> the level of the vix, j.j. is below 20 the options value on the vix is really high. we're talking about six-year highs to levels that we saw last during volume-geddon am i saying that right that was a very testing time for the markets. i'm curious what you see here,

particularly given these tensions are continuing? >> what we have seen over the last couple of weeks is a lot of people, i don't know if it is protecting the volatility they sold, or, hey, if things happen, this vix could explode overall you've seen a lot on that 20-line over the last couple of weeks and the 25-line on vix so, one of the things that happens with vix is you know, melissa, from so many years of covering the options market, is that often when vix does break 20, it happens in a very -- almost an exponential fashion, and in times like this where it can go 20 to 25 very quickly or up to 30 as i said, at the moment, the fact is we are seeing the pain there. i think that will be a crucial point if you will for most investors to take a look at, as this continues and it is not necessarily a huge surprise as we start to see escalating tensions, especially in the middle east, that people

may come into the vix to try and, you know, hedge their positions overall because what has paid off for traders over the last couple of years has been to sell volatility. so, i'm going to guess there are still a lot of positions that have been selling volatility for the last couple of years that are looking for a place to hedge that sort of position overall because, you know, these big firms can't just turn that around overnight and the fact of the matter is as things escalate, people are going to be coming in to buy volatility elsewhere, so those market firms that sell it have to find somewhere to hedge it. >> thanks. now to the global currency markets. joining us now, jesper cole. we saw the most reaction overnight in the japanese yen and the swiss franc in terms of bids to safety we saw gains really getting paired back. what do you foresee here

particularly for the yen and whether boj actually intervenes because we're up at 155 basically and nothing has gone on. >> yeah, no. and, look, i think that what got us from 100 to 155, you know, which is the fact that america is strong, that japan is relatively weak, and american rates are not coming down in a hurry, while japanese rates are certainly not going up in a hurry. so as a result of that, i think it is not bizarre to forecast, you know, 165, 170 or even 180 for the time being the yen is going to be a weak currency. >> particularly we're getting so much fed speak that indicates maybe, you know, rate cuts may not happen until 2025. that's when kneel kashkari said yesterday afternoon. that differential looks like it is going to remain in place. good your forecast to 165 or 170, does that imply that there is no intervention or that intervention will -- might happen, but simply won't work? it hasn't worked in the past >> i don't think that -- there

is obviously lots of verbal intervention, the right thing that you have to do and there was now this agreement with south korea and the treasury sort of coming in and says, yes, yes, we're looking at the yen. but the reality is, if you -- if japan were to start to sell its dollar reserves and buy yen, you know, it would be a one off, it would be a liquidity shot and less policy changes and less the u.s. starts to cut rates, japan starts to hike rates more aggressively, you know you're not going to see a reversal in the fundamental trend and 165, 170 is on the cards. >> so, are traders in your view positioning for continued pressing of the short on yen >> yeah, i think that that's exactly right. and you find most importantly japan investors, whether the big insurance companies, whether it is retail investors, you know, they are the ones who are bidding up the dollar and any dip that you get, any sign of short-term yen appreciation is

going to be seen as a buying opportunity because the fundamentals still point to america first, strong america, rather than a strong japan >> will we see an impact on the u.s. treasury market given japan is the largest holder of u.s. treasuries if they do intervene? >> the answer is, you know, there is intervention. i think that's going to spur more outflows from japan with the private sector actually welcoming the significance, sorry, not the significance, welcoming the liquidity provided by the bank of japan at that point. for all intents and purposes and to repeat the point here, if you're a japanese pensioner, if you're a japanese insurance company, getting 4%, 4.5% in u.s. treasuries is a very, very good deal to have, given that domestic interest rates are still below 1% >> right thanks it is just past 7:00 a.m. right here on the east coast you're watching "squawk box" on

cnbc i'm andrew ross sorkin with melissa lee on this friday morning. joe and becky are off today. we got a whole lot of headlines to bring you right now breaking news overnight, israel carrying out what appears now to be a narrow strike against iran. and now assessing its effectiveness. the damage caused. the action appearing to be limited in an effort to avoid escalation futures falling close to 300 points earlier this morning on that news. modulating right about now, however. meantime, we're going to get a live report from the region in just a couple of minutes in corporate news, shares of netflix, they're under pressure, the streaming service beating expectations on the top and bottom lines and blowing away expectations on subscriber additions. shares falling after the company said it would disclose less data about subscribers starting next year, as in it will not be disclosing the number of subscribers. meantime, hoyundai pausing advertising on x due to antisemitism, saying an ad appeared adjacent to an

antisemitic and pro hitler post on the platform. american express just out with quarterly results, earnings coming in at 3.33 a share, much better than what the street was expecting, 2.96. revenue increasing 11% to 15.8 billion. amex is afifirming its full yea revenue, the stock is up .7%. procter & gamble's be third quarter results just crossing the wire, topg esping estimates 1.41 slight miss. procter said its growth was driven by volume in the march quarter. the company raising its full year eps growth guidance here with us now to break down that report, jon moeller, president and ceo of p&g stock, by the way, relatively flat on the back of that news, jon. but speak to it in terms of what you're seeing more broadly in

the economy and what this last quarter says and maybe what you're starting to see coming up next in terms of the strength of the consumer >> well, on a global basis, there continues to be as you're very familiar with a lot of volatility, a lot of divisiveness, a lot of tension but the execution of the strategy by the team is overcoming all of that so you mentioned -- you referenced sales growth in the quarter, 3%, 8 of 10 categories growing. we built volume share. we built value share earnings per share growth, 18% on constant currency basis, and we just increased our dividend by 7%, making it the 134th year this company has paid a dividend, 68th consecutive year they increased the dividend. and as you mentioned, we have -- we're able with those results to hold our guidance for the top line and to improve it for the

bottom line. so, all in, beautiful execution of a winning strategy by the team, which is overcoming many of the challenges that we face one of the big questions that was out there relative to the health of the consumer was volume with the amount of pricing that we had to take to overcome increased commodity costs, what would happen to volume, volume in north america in this quarter plus 3%. the last four quarters, plus two, plus three, plus four, now plus three the same general dynamic in europe, with volume up 4%, sales up 7%. so sorry for the long winded answer, andrew, but it is a complicated but very encouraging picture. >> well, let me just speak to the challenge of this that we're talking to andy jassy, just about a week ago, from amazon, and he said one thing he's seeing is the tradedown is that consumers are trading down when they can are you seeing that in your

business >> we really aren't. one of the metrics that we look at to assess tradedown is the progress of private label shares they're up modestly in the u.s., they're flat in europe and in both cases we're growing share, both value and volume, ahead of that pace and, you know, why is that i'm certainly not denying the reality that others might see, but we have concentrated our portfolio in daily use categories where performance drives brand choice. so as long as we can bring a product to market that performs noticeably better, noticeably better package, communicated effectively, that creates value that overcomes some of the pricing and we try to combine those things so we bring innovation to the market, as we bring price to the market, and thus far that's been a winning approach >> your portfolio is diverse,

though, jon. i'm wondering if there are certain categories where you're seeing more pushback from the consumer than others, seeing volume growth not as strong as in others which would imply that consumers are looking at the price increases and thinking twice. >> it is a fair question the dynamics, though, are pretty similar across the categories. the growth rate volume to value may vary by 2 or 3 points. but generally the dynamics that i expressed hold true across the portfolio, and generally across markets, with some notable exceptions in very tough markets like argentina and nigeria, egypt, pakistan. but as i mentioned, volume growing, and value growing in europe, volume grewi inggrowingu growing. china is down a bit as the market continues to struggle but even there we're seeing

sequential improvement quarter to quarter >> in terms of -- is there a market right now you're excited about? it sounds like every market we're talking about is challenged to one degree or another. >> i'm very excited about the u.s. and the progress the team is making there. i'm very excitedabout europe 7% growth in a very mature economy is wonderful to see and i think there is a lot more there, the same in the u.s when we bring products that make a difference to consumers lives and do it better than anybody else and price them affordably, the opportunity is endless >> jon, you're one of the largest advertisers in the country. i like to talk to you because i think we have lots of executives, ceos, who are on either big tech companies where you buy advertising or big media companies where you buy advertising. what do you see working? what do you see not working right now? >> well, we have a better array of tools and channels available

to us than we have ever had in our history. and so advertising can be both more efficient and more effective. if you think about a product like vix cough and cold medicine, when we just had the tool of linear tv or radio, it was very difficult to efficiently advertise because unless you had a cough or cold, or your child had a cough or cold, you really weren't engaged and so there was a huge amount of waste and now we're able to much more narrowly target that person who can benefit from the product on that day, so as a result, returns are increasing, not decreasing, and just take the last quarter as an example, while we increased earnings per share 11%, we got 18% on the constant currency basis, we did that while increasing advertising, marketing

comprehensively defined by 15% the same dynamic last year so this is a good environment for advertisers now. there is some things that -- some challenges that we have to overcome but if we can do that, we have better and better tools to communicate to consumers every day. >> you got a platform you like you guys advertise on x, by the way? >> i don't have -- i don't have a breakdown of the -- by channel, i apologize, but -- >> we were just discussing that because hyundai was pulling its advertising. i was curious what you think is working and what's not but, jon, thank you for joining us as we're trying to figure out what's happening in this economy and as we're really trying to figure out what's happening even overnight with this attack that israel retaliating to iran so thank you for coming on this morning. >> thank you coming up, the vix back to its highest level in a month on

middle east tensions and interest rate shifts we'll talk about that after the break and what it means for investors. and later, netflix's results and the decision to stop reporting sub numbers. tom rogers joins us to talk about it in the streaming landscape. "squawk box" will be right back.

israel launching a limited direct military attack on iranian soil the news comes days after iran launched its first ever direct attack on israel in the form of more than 300 drones and missiles nbc's richard engel joins us now from jerusalem with more richard? >> reporter: so, this strike was limited. israeli official telling nbc news that the strike took place, iranians say that a military base near the city of isfahan was targeted but even the iranians are downplaying this with state television showing pictures from isfahan with life as normal, one anchor on state television said that this was, quote, no big deal here in israel, they have not imposed any new restrictions or guidance people are not being told to go to shelters or limit their behavior in any way. people are out on the streets,

here in jerusalem, tel aviv very much the same. israel had promised to respond to the iranian attacks, which were triggered by an initial israeli strike on an iranian diplomatic facility in syria but it does seem now after this limited strike that both sides, judging the reaction that we're seeing, are trying to pull back from the brink and not have this spill into a regional war. so, we did see a strike this morning, limited in scale, and so far the reaction has been quite muted. >> has iran even attributed the attack to israel >> reporter: the suggestion in iran is that this was israel, and if you -- the commentators on iranian television are describing it as a win for iran. they're saying that what happened a few days ago, when over the weekend, when iran launched more than 300 ballistic missiles, drones, cruise

missiles, that iran sent such a strong message to israel that israel was afraid to do anything more than the most minimal kind of attack that it carried out this morning so, both sides are trying to walk away from this with a win, and that, frankly, is a very positive sign for regional peace or for the possibility of this escalating to a direct conflict between israel and iran drawing in the united states >> richard, thanks richard engel in jerusalem for us and both sides taking it as a win. we're seeing that play on the futures market this morning after israel conducted that limited strike on iran overnight. wall street's fear gauge, the cboe volatility index spiking over the past month. we now see it at 19, almost 20 for more on the vix and the fear that happens that appears to be gripping wall street, let's bring in mandy sue, head of derivatives markets intelligence at cboe global markets

great to see you. >> great to be here, melissa. >> so what does the vix tell you right now? it seems like the positioning now by traders is that there is an anticipation of higher volatility going forward. >> yes, the vix spiked higher this month i wouldn't call it unexpected in the sense that all throughout q1, despite very, very low volatility, we started seeing traders build up positions in vix, particularly vix upside calls, playing for the change in the volatility regime and that's exactly what we have gotten. now, what i'm watching for here is really for vix to go higher we need to see significant escalation on the geopolitical front, which as we heard from richard maybe won't happen and more uncertainty, more turmoil on the macro economic front. and on both cases, if you look in the rates market, what stands out to me is rates volatility has been new despite the surge higher we have seen in yields, different from last fall, where as rates were going higher, rates volatility was much more

elevated, signaling more uncertainty about the path of rates, and this time around, yes, we're talking about a delay in terms of fed cuts, but the policy direction is still one way. it is still going to be cutting, right? i think until we get meaningful risk of potential height, that's what i'm watching for in terms of rates volatility spilling over into equity, taking vix higher. >> you haven't mentioned earnings season, we're at the start of it. netflix being the first of the big cap tech to report and that was disappointing. that's what we're seeing in the premarket. what are you expecting here, particularly as we see semis, which had been the leader in tech, semis are about 20% of the nasdaq, in correction territory, nvidia, the leader there, in correction territory as well >> exactly i think this earnings season is going to be very important i think especially as the macro economic environment turns more challenging. i think really needs earnings to not just beat, but beat significantly in order for the rally to continue and what we're seeing in the derivatives market

is that options and traders pricing in a lot more single stock volatility, so the idiosyncratic risk that is being priced into the market in excess of the vix is at almost the highest on record. people are expecting this earnings season to be one of the most meaningful or most impactful on record. >> where are you seeing the most bets within -- i'm curious, within technology, for instance. >> not surprising, it is nvidia, the leaders we have seen, where we see the biggest increase in terms of option activity, the vix increase in terms of volatility that is where investors have been focused on where nvidia goes, the rest of the sector almost, the expectations it will go. >> are you getting the sense that investors are making directional bets or hedging a position >> i think in vix, it is primarily hedging. and what is interesting is the theme this year is that people have been gravitating away from traditional hedges and s&p puts,

towards volatility hedges, toward vix that's a function of both kind of lower levels of -- the potential for vol to explode, and to double and triple and it takes a much bigger catalyst and a function of positioning, as people pile into equities, build up their positioning, that need for hedging increases and right now people kind of gravitating toward vix and very notably last friday, we did get a vix pop, we had over 2.6 million contracts trade on that date in vix options, higher than what we saw in march of 2020 during the pandemic, which i thought was pretty incredible. >> where do you think vix ends up >> my expectations, near term, is we stay in this newer range of, like, 15 to 20, so, you know, mid to high teens. i don't see us breaking out into the 20 to 30 range until something kind of more serious on the macro economic front emerges. but i do think right now there is enough uncertainty with direction of fed policy and inflation and earnings to keep

vix in this 15 to 20 range that's my expectation for the near term. >> mandy, thank you. >> thank you >> okay. thank you. when we come back, sl green making a number of deals in the commercial real estate business, trying to shore up what has been a rough year so far for the sector the company's ceo will join us after the break. later, chief investment officer at bitwise asset management will talk crypto prices as bitcoin has moved up today on the back of the news from israel and iran "squawk box" coming right back aouerti n f >>nnnc: meowor today's aflac trivia question. what is the longest roller coaster in the united states the answer when "squawk box" returns. uh-huh... - hip-hop! - limping! mmhmm! medical bills! uh-huh! - pancakes! - cash! who pays you cash when you have medical bills? grrr! no idea. [tapping] gap! the gap left by health insurance? who pays cash to help close that gap? aflac! oh, aflac! get help with expenses health insurance

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report it completed more than $2 billion of debt refinancing. joining us for an exclusive interview is the ceo of sl green realty marc holliday good morning to you. where are we all we do is wring our hands typically about commercial real estate, about four-day workweeks in new york city, about security issues, safety issues, how are you feeling right now? >> i feel really good. that's why i'm here today. i know you spent a lot of time talking about -- >> that's why we wanted to have you here. >> earnings call yesterday, first time in four years, not one question from the analysts on work from home. it is really something that i think is in the past we monitor our portfolio we have got 900 tenants, we have a pulse on everything that is going on in this market. people are back in a big way new york and miami, leading the way back to office i think that was in my opinion

somewhat of a failed experiment or overblown experiment if you will, for some companies it works as part of a 3, 3 1/2, 4-day work period. for most companies, everybody is back. >> everybody five days >> not everybody five days but it wasn't five days prepandemic either people are on the move people travel. people entertain people relationship build, people take time off that's not a new thing you know, our occupancies are 70% to 80% of where they were prepandemic, but at that level, for us, the buildings are full, in some cases the buildings are at or above prepandemic levels >> is that going to be the new norm >> no, i think it is still -- >> we're still evolving. i think there is a new generation of workers coming every year out in the schools, into the workforce and they're hard workers they don't know from the pandemic era

i have young people in my office, they were in on sunday last week, they're there in the evenings, it is not quite the way it was, but, you know, we don't get asked the question about work from home policy. >> you don't think -- there has been the occasion that even folks who have leases that are current that are going to roll in two or three years, that all of a sudden they're all going to trade down they're going to say, you know what, actually, can have three floors back. we just don't need it. >> i don't want to talk up the book you have to look at the data in my portfolio i ended the year over 90% lease. that's four years in the pandemic, and we're projecting to be 92% lease by the end of this year. that means we're leasing space two tenants making long-term commitments of often between 7, 10, 15-year commitments because they know the future for thieir businesses is to have the central hub. i'm talking about a very

specific market. i want to be clear i'm talking about greater, east midtown, not the far west side or penn station or downtown. not talking about that i'm talking about places that are commutable, where they have a building stock that is highly improved and amen tatized third to broadway, that block of space is still internationally considered new york's equivalent of -- >> you don't think in new york it is all moving west? you're not a believer that they -- the hudson yards phenomenon is supposed to move everybody -- >> with all due respect to my friends at brookfield and related companies, like that, it is not what i think, it is what the data says. the vacancy rate in what i call the park avenue spine, where we dominate ownership, sl green has made its case everywhere from 23rd street to 59th street along

park avenue and everything just east and west of it, that market is about 10% direct availability that is -- that's almost prepandemic rates and we are moving our rents up in those buildings. but that data is in our supplemental >> okay. i want to talk about either developing new properties or buying new properties in an environment where interest rates are frankly out of control >> right >> and whether you think that the economics of developing a new property in this city right now or in some other city make any sense relative to the rental rates that you're going to be able to capture. >> in terms of developing -- it is hard to develop new property in new york. it always is, regardless of rate environment. it took me 20 years to build one vanderbilt one of the most iconic office buildings in the country, perhaps the world, most successful in terms of rental achievement, that's 20 years to plan for a building like that today, i got to be looking at a

demand and rate environment that might be 5, 10, 15 years in the future what we're doing today, and where we see the opportunity today is on the credit side. people know us as owner, managers of real estate, we're also one of the leading providers of subordinate capital in new york. and i've done $17 billion of that business over the years over 26 years. all of it right here in manhattan. that's where i think the action is, that's the best part of this market where you get good risk adjusted returns, mid to high teens and that's where we're raising capital around a billion dollar opportunistic debt fund that we're in the market right now. >> when you do look out four to five years what are your forecasting as the interest rate environment? is there an assumption rates will be higher still >> you know, i've been in this real estate business in new york for 33 years, one thing i learned is i don't predict interest rates i follow the curve so, we always model the forward curve plus 50 and that's kind of

our guru we stick to that because that's the best estimate in our opinion of what future rates may be when i'm looking at deals right now, i'm looking at ten-year rates, five-year forward and they're not that high. i know relative to where they were, 4.5%, it may seem breathtaking but i've done business in 5, 6 and 8% treasury markets and it is okay. and in fact i think there is more opportunity for people like us and you heard from john gray yesterday, people like blackstone, in this market, which differentiates between, you know, the people of reputation track record experience and lower rate environment where everybody is a hero. >> right >> marc, thank you for coming in this morning >> thank you very much >> we're going to visit you. i think we should do the show -- >> you should do the show from there. >> let's schedule it. >> let's schedule it get a good view. >> just be careful they may not be listening to us, looking at the amazing views and

experiences. it is fun up there. >> we'll get vertigo thank you. appreciate it. >> great being here. georgia governor brian kemp joins us, he's been local about unions moving into his state, he says they're putting the economy at risk. he'll talk to us about antiunionization strategy. and lar,te the fed's new rate path and the state of the economy, esther george will join us "squawk box" will be right back. a driven insights, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar. i've got another one.

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welcome back to "squawk box. we're keeping a close eye on futures this morning after news overnight that israel conducted a limited strike against iran. right now we have really recouped a lot of the losses initially felt on the news reports of that strike the dow was down about 300 points it is now down by 45 s&p 500 down by 9 and nasdaq lower by 60, impacted by netflix and the results last night netflix, by the way, down about 6% premarket taking a look at treasury market, the ten-year yield, bid for safety, yields lower,

4.596% two-year note, 4.971%. on the oil front, we did see brent go above 90 bucks a barrel at one point overnight right now we're down to 86, down by a percent here, wti down by .9% and in the gold market, again, no surprise, we saw initial bid for safety, though a little bit off of those highs here, down by .3%, 23.91 is the level bitcoin right now, we'll have much more on the crypto market after the break with the cio of bitwise. right now, up by 2.6%. r the program, esther george willbe our special guest. "squawk box" returns after a quick break. (vo) the key to being rich is knowing what counts. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates,

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learn more about a brighter way to invest in gold at sandstormgold.com. welcome back to "squawk. bitcoin halving expected to happen today or tomorrow the impact is already priced in currently. bitcoin prices now 65,000, moving up even higher. joining us is matt hogan, bitwise asset management cio good morning to you. let's speak about the halving and what you think happens to the value of bitcoin is this a buy the rumor, sell the news situation, or something

else to think about? >> andrew, good to see you glad to be on. i think this is a buy the news event if you pan out long-term if you look historically at halvings, the price action around the halving, if you look at a week or two weeks is muted. if you look out a year, the bitcoin price is relative substantially after each of the past three halvings. i think it will do so again. you can overthink this, the amount of new supply of bitcoin coming into the market is being cut in half. removing $11 billion of annual supply i think big picture that has to be good for price and that's what i would expect over the next year. >> what do you make of the debate we have been having, you've probably seen it over the past week, since the -- since the retaliatory attack and now this other retaliatory attack overnight, there has been this question about, you know, is it a store value, a safe haven, what do people do in this moment when there are these geopolitical risks and what does

it say about what the price movement has looked like over the past week and a half >> yeah, absolutely. you know, there are a lot of cross currents in bitcoin's price right now. there is etf demand, the halving, there is tax-related selling and, of course, geopolitical events. i think you can try to read too much into the short-term trading activity, it is better to pan out. if you look big picture, it has done a great job of protecting us against inflation post covid. i think eventually it will be a good hedge against geopolitical disruptions, but it is a bit too much to ask for bitcoin to both be a perfect risk off asset, and deliver exponential returns. it is an emerging risk off asset. when it is fully mature and perfect hedge for the events like we saw in iran and israel, those exponential returns will be gone. you have to keep that big picture in mind. bitcoin is growing into what it will eventually be

>> it also has done a good job of protecting the gains that bitcoin built into the etf conversions and so i'm wondering, a lot of people are already positioning for the next etf and etf, but the ceo recently said he thinks the application will be rejected what are your thoughts on whether or not that will actually happen? that was the next great catalyst supposedly in terms of the next crypto to see that big run >> yeah, we have a filing at the s.e.c. right now for an ethereum etf, i can't speak to that specific filing. but i think actually the bigger catalyst is still with bitcoin itself the biggest unlock is coming probably in q3 and q4 when the major wire houses turn on access to bitcoin we haven't really even got through the full totality of the bitcoin etf launch i think we will get in ethereum etf eventually it will be you know maybe later this year, maybe early next year and that will be exciting as

well but there is a lot more to come on bitcoin specifically. there is a lot of reasons to be excited about bitcoin specifically before we move on to the next thing, which is ethereum >> is your sense that it is the etf where you're going to see most of the action, if you look at what sort of -- how bitcoin gets acquired, if you will, by investors, how much of this is going to be the etf versus the underlying asset and does it matter >> i don't think it matters except in the sense that what etfs has done is they have unlocked the ability for professional investors to access this market. it is very difficult for endowments, for advisers, family offices to buy bitcoin on an app. it is much easier in an etf. i think the marginal new buyers are in the etf professional investors control most of the wealth they just started being able to access bitcoin because of this etf launch

i think that's where the marginal activity will take place. you'll see bitcoin being bought directly as well bitcoin is going through both a demand shock from the launch of the etf, and a supply shock from this bitcoin halving those are happening at the exact same time and that's a really exciting setup for the next year ahead. >> okay. matt, want to leave it there, thank you. appreciate it. >> thanks for having me. coming up, netflix shares falling after beating earnings rttimates, saying it will stop repoing subscriber numbers next year. we'll break down the report and what it means for streaming next we'll be right back.

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her uncle's unhappy. i'm sensing an underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for. netflix shares are facing pressure after it announced yesterday it would no longer be sharing quarterly membership numbers or average revenue per user reports starting next year. this quarter saw substantial rise in total memberships to nearly 270 million, joining us

now is tom rogers, former nbc cable president and cnbc contributor, also friend of the show, of course. tom, great to see you. >> great to be here, melissa, thanks >> in terms of stopping those metrics, what does that tell you? >> well, the crown series may be over in terms of netflix airing a great show but they're the triple crown winner when it comes to subs, when it comes to profitability and when it comes to viewer engagement i don't blame them at all for wanting to focus on viewer engagement they produce, by themselves, more tv shows than the entire tv industry produced in 2006. and they have more hit shows than all of their competitors combined but this notion that they're going to focus on engagement as opposed to subs just doesn't make any sense to me since when is the number of homes you reach not important to engagement you got to know the denominator

of what your potential reach is to know how shows are now performing relative to how shows in the past were performing. i can't imagine advertisers saying, well, it doesn't really matter to us how many homes you're in from an advertising -- in terms of the number of people that take your ad tier do you have 23 million subs that have exposure to your ad tier or 35 million homes they're going to insist on that kind of information. and once advertisers start insisting on what that home reach is, not only in the united states, but all markets, where they're going to be selling advertising, i think that those numbers are going to become available and people will aggregate it back into what membership numbers are so i don't really quite get, say, i'm going to focus on engagement, but not give you the denominator in terms of our

reach, particularly when scaled reach in such a fractured median market -- >> tom, do you think there is something -- what do you think this says, though, about the strength of the business you think this is them saying the growth story is over or the growth story is different or what the stock is down because i think there is a frustration about this, for the reasons you're describing, but what do you think is the motivating factor behind it in terms of what netflix is trying to do to reorient the investor mind around their numbers >> well, when you do something like this, there is always a presumption that something is being hidden that isn't going to look as good as it did and i think it is probably pretty obvious that is average revenue per subscriber, because they're going to be adding a lot more subs and markets, particularly in asia, which have lower revenue per sub. the ad tier as i said on the call is going to take some amount of time, my guess is

considerable amount of time before the revenue that they're getting from an advertising home matches what they're currently getting from a nonadvertising home, given how successful they have been on raising price in the nonadvertising subscription homes. so, that number on all cylinders, i'm as bullish on netflix as i've ever been. but i still don't get it if you focus people on engagement they got the number one original show, number one movie, number one acquired show for over 40 weeks of a 52-week year their engagement is great, but if you're really going at advertising and its growth, the advertiser will want to know what that universe is to be able to make comparisons as to how shows are actually doing. >> are we making too much of this the stock is down 6.25%. a little might be the run it had prior to the earnings release

but we spoke yesterday they said we'll have the revenue number the informational subs might not be quarterly but we'll get some information and we'll be able to figure out the math at some point so you will have some visible, although maybe not as timely is there too much of a discount? >> i think what rich was referring to was netflix did indicate when they hit certain milestones this he'll talk about sub numbers, but, again, if you're an advertiser in japan and want to know if netflix is in 10 million or 20 million homes in terms of the kind of reach it has every advertiser in every major market will look at that kind of information i can't imagine they're going to say to an advertiser, sorry, you can't have that and the information is going to be out in the marketplace in some form, i would think. i just can't imagine them as they're trying to grow an ad tier stiff advertisers on the reach in any given market of the

advertising sub, so i really don't get it it certainly makes sense for them to focus the market for earnings purposes on the key things that they want the earnings metrics to be in. there's a notion that somehow second quarter guidance was disappointing on a foreign exchange neutral basis they'll grow 21% is kind of silly. so they're hitting on all cylinders and doing great and are the kings of streaming media but this is a head scratcher to me. >> always great to get your thoughts coming up, georgia governor brian kemp on unions, the economy and so much more that interview is next. check on the futures right now. things are getting better, dow off now only about 76 points after being down nearly 300 points overnight as we heard

about retaliatory strikes from israel towards iran. that seems to have been limited. we'll talk more about that as well when we come right back unn. amelia, unlock the door. i'm afraid i can't do that, jen. why not? did you forget something? my protein shake. the future isn't scary, not investing in it is. you're so dramatic amelia. bye jen. 100 innovative companies, one etf. before investing, carefully read and consider fund investment objectives, risks, charges expenses and more prospectus at invesco.com.

the statement comes as volkswagen voted on unionization and one of those officials is governor brian kemp. we appreciate you joining us >> good morning. h >> how did you decide to sign the letter and what are you telling folks in the state of georgia about these efforts? well, really the model down here is working it's doing great we had great relationships between our employers and their employees, and there's a reason that the south and the southeast gdp is now outpacing the northeast and i don't think that is understood and the way the uaw's tactics have been and i don't think it will play real well and our message is, look, we are recruiting these great

companies that are coming and building plants in our state and providing jobs that pay above the county -- average contestant wage, great benefits and have great relationship with our employers and his bernie sanders-type tactics won't play well in the south. >> you think ultimately it's going to result in layoffs if, in fact, the unions were to win there? the flip side of that, of course, is, you're looking at the detroit strike in terms of 25% pay raises so there are workers, i think, in your state looking at that going, look at what those guys just got and we don't have that. >> well, i think what people are looking at there, andrew, is shawn fain helped a few and screwed others you're seeing the big three laying off plants because of costs going up and have to idle their plans for electric vehicles in the marketplace, and you look at places like georgia, you're not seeing that happen.

full steam ahead companies giving pay raises and continuing to work with their employers to make sure that they can keep up with bidenflation. >> it seems unprecedented for you to sign this letter. why not just let the workers vote, and if everything is going as well as you say, won't they reject this effort >> well, i mean, look, the workers are going to be voting today. we just want to make sure it's a level playing field and people aren't browbeat by bernie sanders-like tactics from shawn fain destroying great american companies. we don't want to see that in the southeast. there are a reason businesses are coming here. we have a great workforce and paying that workforce. when you look at the south and the, you know, like in georgia, our increase in wages is well above the national average because of companies like this paying better wages and better benefits and giving great opportunity for our people and what the uaw is doing is going

to destroy those type relationships and we've seen that in the northeast and simply we don't want to see it in the southeast. listen, we have great relationships with other unions here in our state now, but they actually work with our businesses and our employers to make things work and that's not been the uaw's tactic. >> governor, do you think that employees in georgia at some of the automakers have been beneficiaries of the uaw and other union's -- raising wages in other states in other parts of industry have forced or created pressure to raise the rates anyway >> well, we were seeing rates and salaries and benefits go up long before the uaw fight. just because of the growth that we've had our state coming out of covid

not wavering when we were the first in the country to re-open even when we had people on both sides criticizing us of that our unemployment rate continues to be near record low which is way before -- way below our previous record so it's been a competitive environment here where wages have continued to go up the problem is for our workers is our wages are going up, but, unfortunately, until recently they weren't going up fast enough to keep up with the disastrous policies of the biden administration when we saw energy, groceries, insurance, mortgage rates, rent, and other things going up expo inter interceptionally. >> i was going to ask you about that, governor i noticed that you called it bidenflation do you hold president biden accountable for the inflation that's taken place during the last 3 1/2 years, whether you look at jay powell and say that the federal reserve missed it. is it his fault if you're going to lay blame

how do you think about inflation and whether a president can control it >> well, listen, it's easy to go back and criticize the fed i personally think they waited way too long to start raising rates, and i hope they don't wait too long to start lowering them they're in a good posture right now from what i know, but, look, there's no doubt that this president has spent an enormous amount of money, pumped an enormous amount of money into the economy when at the same time early in his administration he was telling people stay home, don't come back to work, which created, you know, much more demand than supply out there, because people weren't in the workforce which drove prices up, then when you start having pieces of legislation that are mandating certain things like electric vehicles that continues to drive prices up on batteries, rare earth minerals, the whole supply chain network, so, yes, i do think the biden

administration's policies have created this inflation aerovironment we're in. >> let me ask you, finally, about the ev market because i know you're a proponent of attracting electric vehicle production to georgia. but evs have become almost a political football for some. i mean, there is a view that some people are not buying evs in part because it's considered politically incorrect potentially if you're in a red state. what do you think of that? >> yeah, look, i agree i mean, that's the problem with it i sent a letter to our senators before the vote and said this bill is picking winners and losers joe biden and the democrat are trying to help the union backed folks but punishing the nonunion folks in the south when you start mandating things it's like on the vaccine when they started being mandated it made it all political versus letting the companies decide what their customers are going to want in the future.

the government is not going to do a better job than the companies on what kind of vehicle people are going to be buying i visited north american headquarters of porsche. say sales are incredible i was in the club car ribbon cutting yesterday. they have an electric utility vehicle that people are using like landscaping crews on college campuses and their sales are off the charts because that's what their customers want, so i think the market is going to continue to work. i mean i used an electric chainsaw the last two weekends people are fishing in bass tournaments using electric trolling motors. we have to let the market dictate the needs of the consumer and what they want versus the government and joe biden telling them what to do. >> governor kemp, it's great to see you. hope to have you back to continue this conversation thank you. >> have a great day. >> you too meantime, it is past

8:00 a.m. on the east coast. you're watching "quock box." among today's top business news, coming in from american express, the company affirming its full year profit and revenue forecast consumer product giant procter & gamble missing analysts' estimates for its fiscal third quarter though profit came in ahead of expectations p&g raising full year earnings outlet and netflix will stop reporting quarterly numbers as they crushed first quarter estimate numbers after an expectation of 4.6 million subs and meantime, shares down on the back of that news. soft futures are soft, well off of the premarket lows, though, that we saw overnight when we learned of that strike against iran right now, we've got the dow down by about 62 point, had been down as much as 300 points on initial news of the attack s&p 500 down 7 points and the

nasdaq off by 48 secretary of state antony blinken said the u.s. is committed to israel's security and de-escalating pointing out israel's objectives can be affected without a rafah offense. raf sanchez joins us from tel aviv now >> reporter: good morning. there is a wary calm across the middle east this morning after israel retaliated following that iranian missile and drone strike, and iran at this point is not vowing retaliation. israel is neither confirming or denying its involvement that the escalation that many, many people had feared does not appear to be with us at least not yet. here's what we know. a source familiar with the situation sttells us that israel carried out a limited strike in the early hours of this morning. israel continues to assess the

effectiveness of that strike, the damage that it caused, the target appears to have been a military base in -- near the city of isfahan just south of tehran we do not know at this point whether this attack was carried out with missiles, with rockets, drones, whether israeli manned aircraft were involved or not. we did hear from u.s. secretary of state antony blinken speaking in italy a short time ago. he says the united states was not involved in the attack the italian foreign minister saying that the u.s. did receive forewarning of the attack from israel but only a short time before the bombs began to drop now, here in israel, there are no new restrictions on the civil kwan population. that appears to be an indication that the israeli government is not concerned about immediate

retaliation from the iranians and it's very, very striking iran across ait appears to be playing it down and the iranian president spoke and did not mention the attack and iranian state media showing live footage from isfahan saying the situation is calm there, saying that the explosions people heard overnight were the sounds of iranian air defenses going off, and not an indication that there was any serious damage, so right now no sign of further escalation guys >> raf, thank you. raf sanchez in tel aviv. okay, meantime, want to get over to mike santoli for the latest on the markets. mike, at the new york stock exchange. >> andrew, obviously overnight there was another kind of gut check. there was a sell response on the initial headlines, now trying to put it in context. of course, one week ago exactly you had the market under pressure for anticipation of

that iranian attack, so now what you have here is a one-year chart of the s&p 500 that's really testing some levels from this rally on the way up from october. overnight, the market got down to this area, a lot of folks have been looking at it, past the 5% pullback, down five straight days getting oversold i wouldn't say dramatically so, but definitely starting to look like we're stretching the downside to the point where you probably are in for a relief attempt and treasury yields were capped on this news today too and what's interesting, we went back to the late february level i've been talking about which was the day before nvidia reported blow-out earnings the next day nasdaq was up 3% and s&p was up 100 points, 2% move and you basically have been kind of up and away from there and giving it back even into earnings season right now. the higher yields have definitely been sort of searching for a pain point, i think, on the consumer

take a look at the equal weighted consumer discretionary sector relative to the s&p just starting to underperform this goes back six months. you see consumer cyclicals were definitely a leadership group coming off those lows and seems like there's hesitation as to how much we can handle the yields and whether, in fact, we're overstating the consumer strength it's in contrast with industrials which remain strong. final look, andrew liked this deal today, nvidia versus bitcoin back to the middle of last year, it's the same chart doesn't work for all time periods but shows you they're feeding off the same, we're going to buy the future at an expensive price type of investor energy >> okay. that's a fascinating chart to keep watching. thank you, mike. appreciate it. when we come back straight off american express' earnings, the state of the credit card and the interest rate environment. using a.i. to prevent homelessness how technology and data is helping families from losing their homes when "squawk box"

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welcome back treasury yields fell as news broke israel struck iran in retaliation for last weekend's drone and missile attack yields have ticked back up joining us to talk about the market, the economic impact of all this middle east tension, where it's headed, joe lavorgna is with us at the white house national economic council. good morning >> good morning. >> are you surprised about how resilient the markets have been? >> it seems as there's a little tit for tat, a little bit of theater. hope that's the case

oil hasn't made a move above 90 which is good. we need oil up around 120125 where it was when russia invaded ukraine but the problem, andrew, is that with oil even in the 80s, summer driving season is coming refining capacity issues, gasoline prices are going higher that will be a problem for the consumer >> what do you make of the volatility >> the volatility in the market is actually pretty quiet if you look at the vix. the oil markets have moved around but markets have been unusually quiet. i'm worried at some point there will be something to kind of galvanize and cause volatility to pick up i don't think it will be g g geopolitical the question is why is the economy so strong, and i mean the fed is very tight. mortgage rates are up near 7%.

housing affordability first-time home buyers, all-time low. the fed is pushing back against the government even state and local governments. we're spending in the gdp accounts at the same pace we were during the pandemic, during where we were in '09 and where we were coming out of the '01 crisis and the government is spending money and the fed is trying to offset that. either the spigot has to slow or they're force the government to stop spending so much and you get weakness i don't believe the employment numbers are as strong as they are, and at some point before the year is up we could get an employment -- >> jason furman is in the camp if there will be cuts from the fed, it won't be a function of inflation. it will be a function of employment >> yes, i agree with jason i've argued that all along inflation has come down but it stopped the last few months which is unsettling and will need a handful of months before they feel it is on the lower

trajectory that gets us to the thick of the convention season. i hear what people say politically. but i don't think the fed wants to do anything in july and it will be harder in september. i agree with jason if the payroll data and the unemployment rate goes meaningfully above 4%, the fed will cut the question is does that happen that's sort of the debate. >> kashkari said he sees cuts because of the political cycle in part and williams said, you know, it's not the base case scenario but if the data bears it out we're ready to hike rates. >> we came in thinking it would be weak and running massive deficits it's clear the economy has held up reasonably well and pushed our cuts out so now i see the first cut in december, so i agree with neil on that that we have to push things out. the yield curve, i come back to many times with clients, it's

been over 22 months and get to july 1, it will be two years it's never happened before at some point something will break. it broke in -- >> you mean a recession that never happened that's what we were saying >> when i say break, i mean something within the markets, like, for example, with silicon valley bank, signature bank. >> okay. >> something will break in these banks. why did powell pivot back in december, because the data didn't justify it. i thought it was political someone made the point it might have been, look, the markets sold off a lot last fall you still have billions and billions of dollars of unrealized losses on commercial bank balance sheets overlay with commercial real estate what if the consumer slows what if gas prices rise, real wages shrink and get more -- we're seeing it on autos and credit cards and fh/fa loans these things become cascading

effects that happen. i'm just saying that's how cycles play out. the problem, of course, you never know when it's going to happen but the environment is still right. >> joe lavorgna with something to think about this weekend. how about that. >> hopefully not thinking about it too much. >> well, you know, thank you very much. appreciate it. always smart. we want to switch gears. according to data from the u.s. department of housing and urban development last year california had more than 181,000 homeless individuals, up more than 30% since 2007 but los angeles county is testing out artificial intelligence to help find people before they lose housing kate rogers joins us with the story. >> good morning. l.a. county's homelessness prevention unit intervened with 800 individuals and families using artificial intelligence to identify people most at risk to offer money to help with housing costings it relies on a model developed by the policy lab at ucla that

uses data from seven different l.a. county departments anonymized for privacy includin behavioral health care from food stamps to income support and homeless services. at risk individuals like courtney peterson are found. she was laid off from her job working for a now shuttered in-patient transitional living program in december and worried she wouldn't be able to pay rent for herself and 7-year-old son. >> i feared that i was going to have to leave my apartment i feared that i was going to have to take my son to a homeless shelter or family shelter. >> peterson said she and her son received some $8,000 from the county program to cover rent, utilities and basic needs allowing her to stay put in her apartment while she looks for a new job. the program is largely funded by american rescue plan act dollars. individuals and families receive between 4 and $8,000 to help covering expenses and stay housed that's a a fraction of the nearly $36,000 that a chronically homeless person

costs taxpayers a year 86% of these people retain permanent housing once they leave the program according to the county the solution is preventive and key for a state that has spent $24 billion in the last few years to tackle homelessness >> compared to the cost both financially and from a human trauma perspective that a person or jurisdiction incurs when you have such a massive population of people sleeping outside, $4,000 to keep somebody in their housing is more cost effective >> >> ethicists raise problems about anonymous data but in l.a. help is reaching some of the at-risk population when they need it. >> about people finding permanent housing, does that imply they found a job and helped them bridge that gap to

be gainfully employed. >> the program does also offer career counseling, so i spoke with courtney's case worker, for example, and she's helping to work with courtney on that issue, but, yes, they wind up at an 86% rate staying in some form of permanent housing and the program checks up with them again at 6, 12 and 18 months and putting together a longer term study. >> thank you, kate >> thank you. coming up, former kansas city fed president esther george is here. next the first quarter results from american express and what it can tell us. amex shares reversing on premarket. owey are lower right n stay tuned you are watching "squawk box" an cnbc

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how do you recover welcome back to "squawk box. the futures right now, the dow is off 30 points after being down nearly 300 points overnight

on the back of the retaliatory effort from israel to iran seems to have been small, narrow, and limited. you're looking at the nasdaq now off by 19 points, s&p 500 practically unchanged after being down bitcoin moved higher by 3% literally overnight and we're keeping an eye on that as well >> american express out with first quarter results with a pretty good bottom beat. amex affirmed full year guidance and what it can tell us about the consumer alexander, great to have you with us. the big beat on eps they had but didn't raise a full year in a comprehensio commensurate fashion >> thank you for having me on. credit quality was really strong

this quarter if you look at american express compared to other credit card issuers, they have the best credit quality and they have the smallest proportion of revenue tied to credit quality, just over a fifth but their credit quality is still better than 2019 levels, right, where if you compared them to other credit card issuers, they're seeing 20, 30, even 50% worst credit quality than they were relative to 2019. in terms of their guidance, we think they're being a bit conservative on that they still have seen a bit of weakness with small businesses, right, that growth is still a bit light but we would say they actually are seeing additional clients, right, so the amount they have is going up but the small businesses are struggling with higher interest rates >> it also seemed like the new accounts they are opening tend to skew younger. what does that tell us about how their customer base is changing. >> that is a really good sign. if you think about american express and the 2010s, they really struggled with younger --

the younger cohort assumed as the card of your parent, not necessarily for the younger person so that's changed 60% of new clients are younger, positive for a couple of reasons, the first reason is if you can spend the marketing dollars thousand and get that customer you can have them for decades, it's a very good value proposition and tend to have retention rates above 90% so the customers tend to stay another good benefit is, you know, younger customers tend to receive bigger salary increases and see increased spending over time without even getting new customers. and then thirdly, american express previously had been sort of known for not being accepted everywhere but that has changed, right? american express is accepted more places so whereas older cohorts don't use it because they're afraid it won't get accepted gen-z will use it everywhere wallet share has increased. >> late fees, how could that

impact them? >> in terms of that we're not necessarily too concerned. that's definitely an issue for lower end credit cards for american express it isn't that big of an issue. >> because the revenue from fees is so low? >> yeah, so if we're talking about late fees, yeah, in terms of annual fees they have substantial annual fees and that's something we would expect to continue to rise and really be a good revenue driver especially in the second half of 2024. >> why do you think the stock is down premarket sort of reversed? >> yeah, so we think there might be a little bit of negativity toward spending so spending came in a little light compared to expectations but we thought spending was fine. it was still an increase from last quarter and there had been some activity there because each quarter we had seen decelerating spending this quarter we saw growth but january was weak we heard that from visa and mastercard and extreme weather in january which slowed spending so we think that might be a

little bit overexaggerated and with small business spending that is still down but card growth is increasing and we think card growth is the number one driver there in the long term if you have the clients, the spending will return >> alex, thanks so much for joining us alexander yokum. coming up, big question, are investors obsessing too much over inflation we talk about it practically all the time what about the other positive economic data out there? up next, steve liesman will join us on the fixation on what he's dubbed the one number to rule them all you don't want to miss this. come on right back after this. (qb) this is it. this is when we find out... (luke) hey, quick question. student body math proficiency... (player) what? (luke) ...would we say it's good? fair...?

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it has become the number, i should say -- >> the one and only. >> the one to rule all other numbers, but should it be that way? steve liesman joins us to talk about the market's inflation obsession, steve >> yeah, melissa the market's focused to one on geopolitics and middle east tensions and saw that with essentially the sell-off and now comeback after we realize things aren't as extreme as was feared but these are important to focus on but quietly beneath the surface the u.s. economy has steadily strengthened this quarter to a point where we'll get first quarter gdp growth next week but the atlanta fed gdp sees it coming in at 2.9%. what's interesting is that's up almost a percentage point in just the past month. the markup in growth and the upbeat surprises have come from multiple sectors of the economy, not just one particular number driving it all

consumption is a big part, up 0.8% we got and that was 0.3% better than the estimate but also manufacturing. that came in the ism came in above 50 for the first time in a while, two points above the estimate and jobs cranking along up 275 and there were retail sales number that really adjusted the gdp outlook up 0.4% better than the estimate but that, of course, april 10th, the inflation number missed by a tenth and it's become the number to rule them all. just a 0.4% on the core cpi, a tenth hotter than the estimate has thrown open the question of whether the fed will cut at all this year and even just how tight the fed funds rate is if the economy is growing so strongly but the growth also means broadly better earnings for companies, all of this comes into greater focus next week and get a few more econ reports that

adjust gdp numbers and perhaps really influence the q2 outlook but get earnings from 146 companies and get a third of the dow reporting so obviously go ahead and focus and fret about inflation. the fed and the middle east, but leave room in there to consider what all this growth we've had means and whether that long awaited slowdown is maybe going to come in the next quarter or maybe not come at all. melissa, it sure didn't happen in q1. >> it sure did not and the silver lining to the hotter inflation you mentioned, you know, the growth in corporate earnings, steve. the silver lining is also households are making more off of savings accounts which they hasn't so there's a lot more income coming in i was talking to my accountant a couple weeks ago and she said so many of other clients are shocked by their tax bills this year because of all the income they made and they didn't necessarily realize how much it was in terms of cds and money

markets, et cetera, et cetera. >> i actually have the same issue, you know, because 4%, 5% sounds pretty good you put it in there and pay a tax on that when the bond comes due. it was interesting yesterday, john williams, the new york fed president spoke and talked about, well, you know, hiking is not its base case but the fed would not hesitate to hike if needed to. the market really focused on that you had a little sell-off in bonds, yields rose, but they missed all the stuff about the williams talking about why is this because the economy is growing much more strongly and, melissa, i'll throw it back to you a little bit i listen to all of these reports on earnings, the american express about what the outlook is here. i do not hear and please tell me if i missed this really much downgrading for either the earnings outlook or economic outlook from any of these reports so far. >> no, but i mean i'm glad you pointed out american express what we've been seeing is beats for first quarter but they're being conservative for the rest of the year so maybe there is

that sort of reservation about how it will shape up and i think that's exactly what markets are fearing at this point. steve, always good to see you go ahead. >> i was going to say i think that's right in part because i think it goes back a year and a half now, melissa, that we have been forecasting that weaker quarter in the next quarter ahead. >> right. >> but it has not arrived. again, i'm hearing these reports, and honestly, i don't know what to do with them, so i do understand, have some empathy for investors being confused by the outlook. >> steve, thanks steve liesman. >> joining us for more on the battle against inflation, we will talk about the number after all, former kansas city fed president esther george. thanks for joining us. i don't know if you had an opportunity to hear that i'd love your reaction before we get into where things are going. >> yeah, andrew, good morning. you know, the federal reserve has a particular mandate, and so it must obsess on the inflation

number, and i think you hear that from policymakers right now. they are going to make sure that the last mile here is one where they remain focused on restoring price stability so i think for the fed, this has always been an area of focus and certainly right now it is very much in focus for them >> if you were to compare your anxiety, if you have it, about inflation versus employment, where would it be and i say that because we're just talking before with joe and i've been monitoring a lot of the jason furman comments over the past week and he made one, he thinks that if, in fact, the fed would lower interest rates in this calendar year, that it would be a function of a weak employment situation, not necessarily the inflation picture. >> so it's a good point and i think this is the tension right now for policymakers

they have to weigh the risk around loosening this policy too soon or keeping it too tight and risking employment of course, as you know, they have a dual mandate. they care about both of these things very much but the one they control most directly is going to be that inflation number, and they must gain their confidence to get back to 2% in a fairly timely way if they're going to retain credibility and keep inflation expectations anchored around that 2% -- >> you're not in the camp that says, you know what, they've gotten through the hard part, they can get to 2% eventually and can take their time to do it you think there's an urgency to it >> i think there's always an urgency to it, andrew. that doesn't mean that you have to double down and get there tomorrow but i do think as they look at their forecast, and this has

always been true, they have allowed inflation to drift down and it's done that, but as they look to see their confidence in that 2%, those forecasts have been pushing out, and so far i think with inflation expectations anchored, that has been appropriate what i'd be watching for is, and i think the committee is too, they don't want to see expectations change. that's what allows them to be patient, that's what allows them to take their time to look at the data right now >> should investors think a hike could be on the table, esther? >> i do think that i don't know that's a base case, melissa, but i do think they need to be aware that the committee right now is saying inflation is holding in in a way that isn't continuing that steady decline, and i think under that scenario, they are keeping all of their options on the table including a rate increase, now, again, i don't

expect that, but i do think it's a signal that the risk can move either way, and they have to be very attentive to that >> in trying to figure out whether the risk is towards -- tips towards a hike or towards a cut, esther, i'm just curious, do you think if we stay where we are right now, does that merit a hike in your view, or do we need to see an upward trajectory in inflation? >> yeah, i think the committee has been pretty clear in signaling they think they're done with the hiking part, and it is still their expectation that inflation will continue to come down. when i listen to the fed speakers, whether or not they talk about cutting this year or not, i think they are continuing to look for confidence in their forecast and believe that inflation will come down so, yes, i do think that if inflation begins to turn on somewhat of a consistent basis

obviously they understand what the instrument is they have to respond to that. but i think for now, they seem pretty comfortable in this wait and see mode >> esther, what do you make of all the commentary by economists and others who say, you know what, as you get closer to the presidential election, despite how independent the federal reserve may want to be, may want to look, all of that, that there is always a little bit of authority on somebody's shoulder saying, hmm, maybe we should -- we got to be careful about how we do this, again, by the way, for the credibility of the federal reserve. >> so, andrew, as you know, this is one of the great features of how congress designed this institution was to provide political insulation around it, if you will, and having served on that committee, this isn't a part of the discussion when you are deciding what allows you to meet your mandate, so, yes, we're in an environment

this year where the election will loom large, where people will interpret the fed's actions relative to who it helps, who it might hurt and that just comes with the territory but i think the public should be confident that the federal reserve is really focused on the information it's getting in and making the decisions that they believe are in the long run interest of the economy h >> esther, thanks for joining us have a great weekend. >> thank you, bye. coming up former u.s. chief technology officer anish chopra will join us on tiktok as they're looking to move on a ayun st ted you're watching "quock box."

welcome back to "squawk box. they've come all the way back from the initial drop when we first heard the news that israel had struck iran in retaliation

for last weekend's attack. so, right now we're about flat here and on the s&p 500, we had been, you know, dipping into positive territory on this final trading session of this week >> meantime, let's talk about what's going on in washington. legislation could be set to ban tiktok, it's in motion gaining traction on capitol hill and could see language to that effect included alongside foreign aid when a series of bills goes to the house floor for a vote that is expected this weekend. joining us to talk about a possible pacific ban or forced divestment and what could happen if congress passes this bill is an an an anish -- aneesh chopra good morning to you. >> good morning. >> this bill gets put into place, what happens to tiktok? tiktok will tell you it's the death of tiktok. it's over. do you believe that? >> no, obviously it's a very popular application. there will be some negotiation with respect to exactly what

form and format a new ownership group might take responsibility. there is a reasonable probability that this escalates. that there's a chance that chinese government may encourage tiktok to essentially say hold the line but in my view this is an important and appropriate action given the national security threats that are real and have been at the heart of why congress is acting. >> i want to get into that but let me ask you about the escalation piece i would argue that that piece happened overnight to bring you that news for the audience that may have not heard it just yet one of the things we heard china told apple no longer to keep whatsapp, signal and a number of other messages apps in the app store that's available in china and whether you consider that an escalation, if you will, of where this is all headed >> well, there's two form, one is a natural and obvious issue around what and how our cybersecurity posture fits

within the u.s. and concerns about chinese hacker groups is sort of category 1 category 2 is, of course, this access to u.s. applications in china. that's already in place. you can't get certain social media applications like facebook or google in china, but the third aspect i wanted to make sure you are aware of, if they simply refuse to sell. what and how would we take on the role of actual removal or degradation of the service in terms of all the provisions. so that's where i thought there may be escalation. >> answer that question. so let's say china says we're not selling tiktok so then you're going to have to call up apple and say take it out. the -- >> you'd see versions of the app stale and not capable of upgrade so that would kind of be the pragmatic view my hope and, again, this is posturing that this may be

just -- if it's 51-49 there could be a deal and this may push a little bit more towards getting a deal, but, again, 80/20 rule is probably -- >> you don't believe they would call up apple or call up google and say, literally genuinely remove this app from every >> no, no, that's not -- that's not even what's envisioned basically, what's envisioned is a cease of support and maintenance. i don't want to be dramatic about it it would basically be, let the thing degrade and service over time >> let me ask you this i think there's a debate, and i worry that we haven't -- i worry that we don't know the full picture. how much of this do you think of as a prospective national security threat, as in, it's not a threat in the moment it's not that tiktok, at least that we haven't seen, maybe you know something different, is demonstrably using the platform to influence, in a nefarious

way, the american public today, but it's the possibility that they could in the future, or do you think they are doing something today that is genuinely nefarious? >> there's two challenges we're trying to address in this national debate. one is, i think, already happening, which is that data on u.s. residents is in some form or fashion in the hands of or accessible to the chinese communist party. that's the kind of data privacy issue, and there are many ways in which that can be used against us, including phishing attacks to get us to mistakenly agree to -- i believe that may be already -- and there's been accusations of this already publicly, there's been some of that exfiltration. the second aspect is what you're describing, algorithmic manipulation we're not privy -- i'm not in security briefings anymore, but to the extent that you want to get a signal, the fact that virtually anyone who's gotten that security briefing in congress has been voting in favor of this bill gives you an

indication that they're concerned. algorithmic discrimination is a fear we're going into an election, and you're talking about market volatility the two big threats are, will social media influence elections and markets? and as my guru, senator mark warner highlights, are the twin towers of trust in our economy >> maybe this is a more philosophical question, aneesh, but we're talking about a foreign adversary in china, but just as easily, there could be an adversary that is domestic. so, where is the line when it comes to congress, when it comes to their ability to allow a business to operate or not operate because they think they are nefariously acting or have too much influence over the american public? >> yeah, this is the area where we need to be vigilant as a society, assuming the bill passes on implementation it's very explicit that it's defined in statute what a foreign-controlled asset is, but

there is some discretion on whether or not organizations are influenced by, and there's a provision that allows the president to assert with some public comment and feedback and engagement with congress what is in that maybe slightly gray area about how far can this go. so, i would stay vigilant on making sure this is tightly administered, but let's keep our eyes open on those definitions because that is the key where unintended consequences may arise. at the moment, i don't believe these rise to the risk of concern to withdraw support from this bill, but let's be vigilant that the definitions of what is a foreign-controlled adversary and bwho is influenced by needs attention. >> aneesh, appreciate your time, your perspective on all this hope you have a great weekend. thank you. >> thanks for having me. coming up, citi's global head of commodities research is going to talk about the oil dynamics in the wake of israel's strike on iran overnight take a look at the futures right now. in a lot better place than we

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oil prices jumping last night when news broke that israel has attacked iran in

retaliation for last weekend's drone and missile strikes but have come back down over just the last few hours joining us on that and other commodities to watch, max from citi great to have you with us. we were above $90 on brent in terms of the initial reaction. now back to $86. what is in this price? is this price still elevated relative to, you know, a week ago-plus because of potential continued conflict >> certainly, yeah we think this price reflects the market expecting ongoing tension in the middle east over the next few months, and obviously, some catalysts for or some reasons for the market to be concerned include president netanyahu's stated intention to have an operation in rafah, and obviously, ongoing conflict in the north of israel with hezbollah. there's a lot of reason to expect that there will continue

to be an elevated risk premium in the oil market, but it's obviously come off by that -- that risk premium was upwards of around $15, and it's come off $6 or so over the past week, week and a half >> sure. i do want to get to copper here. we have seen copper hit two-year highs just in this session today, max, and this is a metal that you are very optimistic about. there are supply issues, but the demand side of things is amazing, especially when you think not just about, you know, buildouts and construction, et cetera, just the historic sort of uses of copper, but also the sort of datacenter overlay and this new economy overlay, which requires copper not just for that datacenter but also for the electrification of that datacenter >> yeah, yeah, that's right. there's so many reasons to be excited about the copper market. both in the short run and over the next one to three years. we think we're on a path up to

$12,000. you know, we're super excited about all of the things you mentioned. we actually think that, you know, certainly, my career in commodities research and as an economist over the last 20 years, this is, i think, we're entering the second secular bull market for copper this century the last time, it was all about urbanization, industrialization in china around 20 years ago. now, as you mentioned, pretty much all the demand growth is coming from energy transition. got really exciting a.i. kicker, which, for the first time, you've got a demand growth driver for copper over the next few years, which is coming from the u.s. the demand growth's been all about china, but this is a very u.s. -- it's a global story but a u.s.-centric demand story, a.i. datacenters >> max, pleasure to speak with you. thank you so much for your time this morning max layton of citi

let's take a final check on the markets after israel retaliated against iran, but markets have modulated in large part on just how limited the reaction has been in a very good way. seems like a very positive situation. we're off about ten points right now. melissa, i want to thank you for hanging out all week it's been a lot of fun join us next week, and 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 at post nine of thenew york stock exchange faber has the morning off. futures do recover what was a nearly 2% drop as iran, so far, not signaling retaliation for the israeli strike last night. oil is lower yields, lower across the curve as we wrap up the week with some blue chip earnings our road map begins with israel carrying out this limited strike against iran we'll take you live to the middle east. netflix, the biggest pr