boeing and at&t this morning meta platforms, ford and ibm after the "closing bell. it's wednesday, april 24th, 2024 "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" right here on cn we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin, and here we go this morning. let's check things out you're going to see a mixed picture right now when you're checking out the u.s. equity futures. dow futures are off by 30 points, s&p up by 3 points we shoals auld take look at

what's happening with treasury yields a tz you know, the trend has been higher and that continues this morning the 10-year is at 4.63 the 2-year while it's in the green, it's a little bit below where we were yesterday, 4.94. still below 5% we'll take a quick look at oil prices data showing a drop in crude stocks, a positive sign for demand yesterday oil prices were higher, this morning giving back just about 39d%. but wti is just below $30 a barrel. >> meantime protests arrive ingn campus speaker johnson speaks about it. meantime late last night columbia's president providing an update, saying the school is now in talks with student protesters to clear an encampment on its west lawn. there's a deadline tonight to

dismantle or they're consider other options to clear the area. the school now says they're not tolerate discriminating behavior they'll put them through appropriate disciplinary processes. we will see. i know there are a whole bunch of donors watching all of this, waiting to figure out -- >> i spoke with a bunch of them yesterday off the record on some of these things, but some of those major donors say the president should have taken a much stronger stand to begin with we're waiting to see how this plays out. but if you look at this, these are college student who are graduating right now who spent the first year remote due to covid. and now you're closing out the four years with potentially not being able to go to classes. we'll see what happens with the graduation too.

it's not that the diagram shows the protesters are covid fearmongerers. they're wearing the masks. >> they're wearing their masks to cover up their identity. >> i know, but i see masks now -- i mean, there are people all over the place wearing masks they're not protesting. take your masks off. if you're doing this, let us know who you are >> they've made it fine to wear a mask during these things they used to say no face coverings at all that changed during covid. but that's the one this keeps getting hit. >> the whole thing is -- you saw yesterday we talked about the president of columbia. you know, it was 20 -- what was it, 23 years ago, months after -- i don't know what her

capacity was at that point, but she said that terrorism is a form of protest after 9/11 just months after 9/11, and she ended up -- >> -- running the place. >> -- in the highest place maybe that could have been your first clue. >> part of what is taking place here is these aren't all students some of these are outside people, so they're ready to take anybody who's not a student -- >> i have to say i'm so not sympathetic to the argument that there are a lot of people out there making this -- repeatedly they're making this point there are outside agitators. in every instance there will be outside agitators. >> i'm not making an excuse. my point is they should kick them out. >> but my point is they should also teal with the students. a lot of times the students are letting in the agitators the idea that they're out there and taking over the school is, i

think, one of the great myths. >> they've allowed it to happen if it has happened they haven't kicked them off campus. >> i think they got funding for the tents. >> the ma i yore is furious because they were throwing bottles and chairs as police officers that's not a peaceful protest. >> i know you don't like my old movie references, but the guy in "the graduate" accuses dustin hoffman and says, hey, are you one of those outside agitators he gets mad because people are yelling. you know, it's classic that was 1967 probably there were outside agitators going all the way back to 1967. in washington, the senate passed a foreign aid bill, the vote, 79-18. they're now sending it to president biden to sign. it includes $68 billion to you crepe, $26.4 billion for aid to

israel, and $8.1 billion to taiwan and indo-pacific security also included in the bill, the requirement that tiktok be divested from its chinese parent, or ban bytedance has some time to sign the billwith a possible three-month extension if there are signs that a deal is progressing. tiktok is set to challenge the bill on first amendment grounds, and groups of tiktok users are expected to take legal act at some time. meanwhile, the ftc bans noncompete clauses that prevents employees from taking jobs in the same interest. we talked about this with lina khan whelp she originally announced it it's now here. it impedes the moving along of labor markets and can increase

prices the new rule can strike down existing ones for all employees except senior executives, and they're defined as the following. they need to earn $150,000 a year and are in policy-making roles. i think there's going to be some questions about some of the people who make more than $150,000 who think they have policy-making roles or don't we'll see. the new rule is expected to take effect in about four months. the businesses say they're going to challenge it. we'll have a lot more on this story. it's going to have huge ripple effects throughout the economy perhaps good, in some cases, bad, and we'll hear what folks have to say about it in a little bit. >> there are situations that have been acruised incredibly if you look at hair salons where basically when you walk in the door, you can't work anywhere within a 30-mile radius. that's ridiculous.

those people have been completely held back you can see definite situations where it's been abused i don't know what the side effects are or unintended side effects down the road. >> i think if you look at the numbers, it should create real income for a lot of people who have been unable to leave their jobs and they're actually able to get a raise within 30 miles and not have to move. >> you're talking trade secrets. >> we talked the other day about real estate and inability to fizzing will i move because they're locked into mortgages. this will be a boost in the short term and maybe the long term having said that, i think the trade secret thing is a real issue and they're going to have to try to figure out how to deal with that. plus the $150,000 threshold is going to be interesting. there are those who make more who don't think they have policy-making oles

maybe they will from a defined perspective think they they do >> we do. >> we make the policy literally as we speak. >> i don't any if we feel powerful. shares of mattel are higher after the toy maker announced a 5 cent loss in the first quarter. revenue of $110 million was short of the -- sorry, $810 million was short of the $832 million estimate, but it did affirm its full year guidance. they're facing comps around the "barbie" movie the company addressed it last night on "mad money." >> we couldn't be more excited about "barbie. we expect more shelf space in the second quarter, more offering for the collector when

engaging them. >> right now you can see shares are up by about 2.75%. on may 4th warren buffett will be holding questions for five hours if you're a shareholder and you've got a question, please send it to berkshirequestions@cm nbc.com. we'll be answering those questioning during the meeting. for those born in -- you remember "three's company. >> are you kidding me? john ritter, the greatest. i went to the set of "three's company" as a child. one of the greatest shows in history. >> i loved him. >> prior to mr. furley, who was don notknotts, who was a classi himself was mr. roper, who was

norman fel wl who accused him of being an outsider. that's -- anyway, is that -- we used to -- >> now i'll be singing the song. >> we're working on -- we're trying to skew it a little bit i'm not helping. >> you're not helping. coming up -- but we want to keep anybody, right -- a bunch of -- suzanne somers just died unfortunately. but, remember, she was replaced by somebody and then she was replaced by somebody coming up, at&t and boeing set to report before the "opening bell. we'll bring you the numbers and reaction on wall street. first, tesla shares jumping after elon musk says the company plans to begin production on a more affordable model earlier than expected. as we head to break, check

out what musk said about autonomous driving. >> if anybody double believe tesla is going to solve autonomy, they should not invests in the company >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. this is our future, ma. godaddy airo. creates a logo, website, even social posts... in minutes! -how? -a.i. (impressed) ay i like it! who wants to come see the future?! get your business online in minutes

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9% in the last quarter, marking the largest decline all the way back since 2012, but the stock jumped in late trading after elon musk told investors that new affordable ev models could arrive sooner than expected. >> we've updated our future vehicle lineup to accelerate the launch of new models ahead of the start of production in the second half of 2025. so we expect it to be more like the early 2025 if not late this year. >> joining us now is collin rush, oppenheimer senior research analyst i don't know if you watch the show yesterday we had one of your -- not a colleague, but someone who is also an allnalyst who said t bad news is in the stock i said i don't know if the revenues are in it or the numbers are shrinking, but what might not be in it is worry about this short-term -- how long it would take to make this

cheaper ev he said that's in it, too, and it looks like he was right, colin. do you think the stock had already reflected most of the bad news >> it's kind of borderline here. i think it's an interesting point that, you know, they pulled forward the low cost ev, but they have offered very little detail on what that cost cut is going to look like. it's pretty clear they've saturated with the model 3 and model y and it's clear the model has stalled. the cyber truck has been pretty disappointing in terms of the production side of it. so they're looking for a different production they can't push any more vehicles through the existing lines into the market. i think they're making a pretty big break going into this

analyst day in august to really start driving the company forward. i think this is an aggressive management team being very aggressive, trying to pivot as quickly as possible and to a different growth vector. >> did you hear grumblings that the company -- there are concerns that the company was shifting its focus away from the cheaper model to robo taxis and that's why elon musk was trying to allay some of those concerned yesterday? did you hear that? >> they're been funding for two months or more that they were shifting it was clearly shifting more of where the vehicle was produced again, we're very short on details as to what that cost number is targeting as they start production and what the vehicle will look like, and so as we look at the model, what we ended up doing is taking eps out and running the margins a little

longer we pulled 20 cents out a full 50 increments out of our eps numbers. we're now back to a controversial stock that's really as much a storied stock as a reality stock at this point where numbers are coming lower and the real growth story is with the ai and robo taxis. >> that was a big drop in margins. that will probably continue, although there's -- i don't know what we're talking about in terms of layoffs and what it will end up being, but does the company have to be really, really profitable, or can it now be -- can you buy the stock because of the, you know, sort of the future? you know, let's just put profitability or great profitability on hold and do all these other things and invest in all these other things will that be enough to satisfy shareholders and will

shareholders have to change? will it be a different type of shareholder? it's going back to the earlier days when this was really a storied stock, that they were going to make an eb and disrupt the market now they're shifting the narrative from being an ev making into being an autonomous maker. there's going to be a little shift. this is the first time elon said he was going to drive across the country with his kids in a self-driving vehicle was well over five years ago, and we're still not even close to having that happen. so when you look at this, there's going to be a certain segment of investors that will look at this in the long term. but the shorts got a look at this last night. there's a demand issue they're getting more of a cost factor than anticipated. but there's still a lot of

investment risks that the company is looking at. they're going to start pressing in the next several weeks. >> will there be any lasting damage in terms of who buys teslas we saw yesterday someone said you'd never see a trump bumper sticker on a prius it's never happened. tesla says, i bought this before he went insane >> it's already happened the buyer for this vehicle has shifted dramatically there was a geological support for the brand for a number of years that the twitter process has really degraded for the tesla brand. you know, it's now going after folks that are vying for a cost-effective model that gets them around. that's the yield to the model 2

and the cost factor profile. they're going after the buyer that's less political and is really more about cheap, affordable transportation. you know, that's where the buying pool is now, the next shift is really about, you know, whether folks want to be early adopters on this automatic technology. we're going to find out. >> okay. we're going to end it there, colin. i nknow definitely the people wo own the stock might shift and the people who love elon have definitely shifted it's a different group i don't know how long-lasting it is and whether it matters, but that will -- we'll have to wait to find out, i guess thank you. see you. >> thank you coming up tomorrow on squawk, we've got longtime investor ron baron he's going to talk about the quarter and where he's putting

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smart glasses. there are new features they can trabs late text from other languages and use the ai assistant to answer questions or complete tasks hands-free. i can tell you as a beta user of these glasses, of the new features, they are pretty

extraordinary. it is just beyond. i thought about bringing them today so everybody could see, but i realize you couldn't -- >> they look like real glasses. >> you mean fashion-wise >> fashion wo-wise, they're gret glasses. they're very attractive. you wouldn't know they're anything. >> that's what's so great about them. >> putting aside the ai, you can be on the telephone and just listen, no headphones. you can listen to music if you'd like, but most importantly, you can now -- because they have cameras in them, you can say, you know, i don't know, if something was broken in front of us, you would say, i need to fix this, how would i do it, and it would literally talk to you, you go to the left, do this, nope, don't do that, do this, you could go traveling, you could say, what is this, talking about a painting. >> could you put your apple

goggles on over the glasses? >> you're not seeing anything through the glasses. >> but you can't put anything over it, then. could you, if you wanted to? >> i don't know why you would. >> i don't know. you love both products i don't know what a guy like you does when you have so many beta -- >> this is the future. we'll all be wearing these things the coolest part is you know how we've gone to come tail parties and things where you can't remember someone's name, right this is not there yet -- i'm pretty convinced within the next five years, this thing will say, that's becky quick and that's joe kernen. >> you're going to look like an idiot standing at a party in sunglasses. >> no, no. >> everybody will know that you don't remember and that you're getting help and it won't be any more sincere. >> we'll all be getting help. >> it's better than looking at their name tag. >> i hate that. >> the worst part is when they don't have name tag?

can i tell you something i'm not going to say the name of the guy, but the whole thing was so embarrassing. i just had a meeting with him. a major ceo of a company i'm at -- >> i've done the same thing. >> i'm at a thing in davao, switzerland, talking to the guy. he's very nice to me he has a badge but i can't see the badge. i say, what do you do. he says -- or he -- i said, where do you work. he says the name of this company. and i don't know any better, so i say, and what do you do there? and he says i run it or something like that. the whole thing was so embarrassing we're in this profession, we should know some of these things the glasses would have helped me. >> i've done worse i've called you by the wrong name i know exactly who you are. >> we all have great sense about this. >> i'm just saying. >> there was once an anchor who

turned to the guy on the left and said, who are you, and the guy said, hi, i'm larry, and the anchor said, oh, yeah, larry, what do you do he said, i'm treasury secretary. >> larry sumner. i remember that. >> another guy before george bush was speaking, he said, i don't know who this guy is talking, george bush and king abdullah it was the king of jordan. >> see, the glasses could be very helpful that's the only point. >> would that have helped? >> i don't know. >> do you think? >> i don't know. >> you won't tell? >> i'll tell you everybody. >> you know everybody and remember everybody. >> i try this person was new to me. >> i talk to people i know that's the worst.

>> you're aaron sorkin or jonathan >> talk to elon about it. it looks like earnings per share coming in at 55 cents. that's better than the 54 cents the street was expecting revenue, a little light. $30 billion versus the $35 billion the street was looking for. free cash flee coming in at $3.1 billion. they had post paid phone debt adds, $349,000 fiber anytime ads of 250,000 the company's pointing out 170 basis points and adjusted ebita margin expansion took place during the quarter they point back to the cost cuts they've been doing the stock is down 2% the revenue was coming in a little light i spoke with the cfo about this. he said the reason revenue was down but that it didn't impact profitability is because a lot

of customers are hanging onto phoners longer than they had he said, all in all, it doesn't particularly matter for at&t because as long as they stay customers, that's fine the profitability wasn't impacted because the phones are not profitable for at&t or the other telecom companies that sell them. they do it for the customers again, i asked if the customers are holding onto the phones longer because of concerns about spending for customers he said, he didn't think so. he thinks it's because the last upgrade cycle didn't have much new out there, plus the phones are a little expensive it takes customers a little longer to go through with them adjustment of ebitda, increase of 100 basis points there. the company pointed out they were able to bring down their debt by $27 billion since john stankey became ceo while they were investing in infrastructure $120 billion in geo fiber networks over that time.

that includes 40 billion with spectrum too the stock is down by about 1.9%. when we come back, new lobbying disclosures report a flood of cash coming into washington that's straight ahead. as we head to a break right now, let's take a look at yesterday's s&p 500's winners yesterday's s&p 500's winners and losers [thunder rumbles] >> announcer: winners and losers is sponsored by state street global advisers. the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy?

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good morning, everybody. welcome back to "squawk box. we're live at times square the futures, not a lot of movement unless you're watching nasdaq, up by about 100 points. meantime some new corporate filings are revealing a surge of lobby money that's now pouring into washington. i'm going to get to washington where emily wilkins is to talk

about which companies are ramping up the spending. good morning. >> reporter: good morning, andrew yeah, meta has set a new lobbying record for the company in the first three months of 2024 they spent over $7.6 million, according to disclosure documents. a meta spokesperson said the increase was less about policy and more about win meta employees in which they got their bonus this year. that i changed up the structure of it. billion, still, there's no shortage of big issues impacting on capitol hill. meta lobbyists spoke to lawmakers, the white house, and administration officials on china, ai, and legislation to help americans keep their data protected online and keep kids safe on the internet. other tech giants also spent millions of dollars each lobbying the government in the first quarter, although, they're spending roughly that what they spent in the past quarters.

bytedance spent $2.68 million in the first three months of 2024 and that's double what they spent in the same amount of time in the last quarter of 2023. but none of it was enough to prevent senators from passing a bill that would ban tiktok from the u.s. unless it divested from parent company bytedance and finds a new buyer in the next nine months. guys >> emily, thank you for that report we're going to keep an eye on all of that. the tiktok story is front and center thanks. when we come back, we have some new comments omfr jamie dimon on what he thinks is driving growth that's next.

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jpmorgan chase ceo jamie dimon speaking yesterday at the economic club of new york, he talked a lot about what we heard from him recently. he talked about his concerns he talked about what a strong economy this has been, and then he brought up some ideas yesterday about what really concerns him about the economy in spite of that strong growth. >> part of the reason i think we've had this strong growth is the fiscal spending. you know, why not spend another $2 trillion. if we did, what would happen you'll have more money people invest more money, people hire more people, and you'd have more growth. but it's also quite inflationary, and you have trade-offs there so far we're in pretty good shape and so far we have a soft landing top of scenario. i'm on the cautious side of that

one. >> a great quote when i started working on wall street, i can't say it in its actual language, but it's something like the markets will do whatever it has to do to hurt the most people. >> i mean that was his point that things could turn at any point and he thinks the market could be setting up for one of those scenarios when it come founds as many people as possibleful he also weighed in on a lot of things including politics and what's happening in washington and he weighed in on the rise in anti-capitalism. >> if the young people like socialism, let them go to venezuela, cuba, argentina, and the other places let them learn the hard way what it's like. we can learn a lot from the rest of the world i'm not afraid of china. i'm afraid we won't get our own act together. >> kind of played in on some of the things you've seen play out

on college campuses across he always talked about how he's a red-blood american, defended capitalistic society he talked about the new york economy. he said new york shouldn't take for granted its success. it should be more concerned about things like taxes, crime, housing policies he gets calls all the time from a city like a memphis or dallas or austin always wanting to say what would it take for you to come here. he said he feels very welcome everyplace except washington, d.c. he says he gets treated like crap. >> whichever way it goes, you've got to bring in the people from the other party. but the thing they need to have in common is they need to have pract practitioners, which means somebody who knowsing is about the private sec to what would that look like if president biden is reelected i don't think he would ever do that he would never bring in -- and i think if trump were to win this

time around, i don't think he -- he might try to bring in jamie dimon. then i wonder, is there any way jamie dimon would serve on the trump administration no way. >> he said he would never go to washington, d.c. he always wanted to be president, but he didn't think anything would be practisupporte and he said if anyone should go, it's the practitioners, not you, but me. >> oh, this is me. when we come back, the ban of ncoonmplete clauses to groups that protested at their offices. we're going to dig into those issues next. >> announcer: this cnbc segment sponsored by baird visit bairdifference.com

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welcome back to "squawk box. google has now fired 50 employees who were involved in protests over a cloud compute deal in israel joining us for that and the ftc's new ban on tiktok. author of the command news line letter and joanne lipman is here at the table, lecturer at yale university, a contributor to cnbc welcome to both of you alex, i think you're up super early this morning because you're on the west coast let's talking google in terms of the culture in the val i have going from this sort of open campus, university model, say what you want, what you will to what looks like a bigger clamp-down. >> yeah, i think you just hit it

on the head. i think google personifies this culture shift that's happening across tech. really across corporate america, but especially corporate tech. you have senior executives on stage in tears when trump got elected in 2016 and the implications of that fast forward you have senator pa jaya saying we don't want politics in the workplace, and this is after they confirmed they fired 28 employees. for google, that's rare, but also by and large. that's a lot of firings at once. >> here's the thing we're all trying to understand what ensome of this began back in '16 and some of the protests in '18 and even '20, and it felt like the employees were running the place, right the inmates were running the asylum to some degree. there was a view among

management they couldn't clamp down on this even if they wanted to because the engineers and employees were so important and if they did something about it, they would have an even bigger problem, that the labor market was so tight, these people would race off to other jobs. >>problem, that these people would race off to other jobs what is the calculus today versus the calculus then >> i mean, i think you've seen a lot of power shift from the rank and file back to the company and what was unusual about this protest is that it was a sit-in protest. so there were people physically impeding others. and standing in the offices of the ceo google cloud, for example. that is really taking things to a new level. google is no stranger to protests but i think they saw this as an opportunity to put a flag down and say, look, we're not going to tolerate this kind of behavior and then they ended up firing an additional 20. >> are you then of the view this

was so egregious, but it is not really a cultural shift, meaning the protests of old, which might not have actually happened literally in the physical office of the ceo of a division, those protests will be okay tomorrow but these protests won't or you think this is a new paradigm >> i think it is a new paradigm. we are seeing a cultural shift i think about, you know, just so happened coincidentally in 2018, there was a huge walkout, about workplace culture and it was about sexual harassment, november 2018, i happened to be at the google flex, google headquarters to give a talk that day. it was supported by the company. it was huge, but it was peaceful and it was -- it almost felt like a party, right? you have this environment versus where you are today. and i think there is a couple of major differences that have happened you know, one is employers have been trying to pull back ever since, you know, the pandemic

where employees all got the, you know, the power, they're trying to pull some of that back. but there are a couple of real differences and the hugest one, i think, is that in those 2018, 2016, you had employees who were together, who were pushing together, unified against management for whatever reason today, you have employee against employee >> much more splintered. >> much more splintered and also you have employees who are saying, i'm feeling unsafe and you're in an environment with now with, you know, with hamas and israel, where you've got an increase in antisemitic incidents and antimuslim incidents. so it is a different environment. and the one other thing i just want to point out is even in the last five years, the dialogue, the cultural, national dialogue has gotten way coarser from everything from politics to congress to public life to people like elon musk who are now out there who are sort of, you know, ginning up sort of a really kind ofvitriolic

dialogue. >> alex, i want to talk about this ftc decision and how it is going to change things california, by the way, has always been a state or at least more recently has been a state where these noncompetes are not enforceable. is this going to change the dynamic there? are we just talking about a different kind of worker, $150,000 seems to be the threshold for preventing noncompetes in the future, but you have to have some kind of policy oriented role that could be potentially little fuzzy and fungible. >> i haven't really seen a ton of high profile examples of tech companies enforcing the noncompetes. you've seen amazon do it selectively. there is an example with an executive who went to google cloud in the last few years, where they tried to enforce a noncompete because he was coming from seattle but, yeah, you're right, california hasn't had this, the california tech industry is the best tech industry and one of the best industries in the world. i haven't met anyone who likes a noncompete, who isn't the one

who enforced it. i think this is generally good there has been a chilling effect, generally. but as it relates specifically to tech, i haven't seen a ton of examples of this actually being enforced i think it is more that kind of unspoken chilling effect >> we got to go. we have 20 seconds a good thing or bad thing long-term for labor? >> very much a good thing. >> if you were a ceo, you go to court over this or no? >> i think they will go to court over this. i don't know that -- i think the question is does the ftc actually have the mandate, do they have the power to put this into place and we'll see how it plays out >> joanne, thank you alex, thank you. appreciate it, guys. >> thank you coming up, a read on the auto industry r foone of the nation's largest dealership networks the ceo of group one is going to join us next

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one of the nation's largest auto dealerships out with its quarterly results earlier this morning. group 1 automotive beating the

street's expectations, both on the top and the bottom lines joining us right now for an exclusive interview is daryl kenningham, group 1 automotive's president and ceo. and, daryl, congratulations, and thanks for being with us today >> thank you so much, becky. pleasure to be here. >> so talk to us a little bit about what you're seeing in the industry right now it seems as if prices might actually be starting to come down, both for used and new cars >> we're seeing prices come down a bit on the new car side, for sure and some of that is related to the oems and their support in the marketplace. the use side, pricing is still fairly firm, because there is a shortage of preowned vehicles in the market and that's -- that's putting a bit of a floor on the pricing on the used side. but, yeah, there is some more competition for sure you're seeing a little bit of pressure on gross profits on the new car side as a result >> the average, though, is still

incredibly high. average transaction price for used car, $29,000, average transaction price for a new vehicle, $51,000 you have to wonder how consumers are feeling about that, especially with interest rates higher today is that an impediment to getting people into cars >> well, we're where we're certainly seeing it is in the lower end of the market with cheaper used cars and there is more competition for that and we're certainly seeing that. you're also seeing our oem partners support their vehicles with some interest rate programs and some large banks, same way, you're seeing leasing come back to some degree, which has been largely nonexistent for the last three years. so, you're seeing more levers being pulled to try to make the affordability story a little bit better but it is no secret, vehicles are more expensive, the truck

mix, suv mix is as high as it has ever been and the content and the vehicles is as high as it has ever been >> daryl, tesla shares are up this morning after the company came out with its earnings last night. it is not because of what happened in the last quarter it is about hopes for the future tesla sales were actually down and tesla is the best of the bunch when it comes to the evs what do you see just in terms of consumer demand, consumer desire for an electric vehicle? >> you know, ev is a challenge these days and i think you saw the tesla results. the thing that we like is the legacy oems have optionality on powertrains. and you're seeing hybrid vehicles are the hottest thing in the market right now. our day supply hybrid vehicles is the lowest of any powertrain we have. and ev is the highest supply we have across the board. good thing about the legacy oems is they have the production flexibility to move between those powertrains as consumer

demand warrants. so, we have followed tesla very closely. they do a lot of things really, really well. and but that's something that i think the legacy oems have as an advantage right now. i think probably for the foreseeable future as the transition to alternative powertrains continues. >> daryl, thank you very much for your time today. daryl kenningham from group 1 automotive >> thanks very much. appreciate it. it is just 7:00 a.m. right now on the east coast. you're watching "squawk box" right here on cnbc i'm andrew ross sorkin with joe kernen and becky quick we got a lot of top stories to tell you about the senate just passing a foreign aid bill with a vote of 79 to 18, sending it to president biden to sign. it includes a requirement that tiktok be divested from its chinese parent or be banned. lots of questions about what happens to tiktok next meantime, the federal trade commission voting for a nationwide ban against noncompete agreements. the company is used to prevent employees from taking jobs with

competitors in the same industry and, yes, industry planning to sue over these new rules and the house speaker mike johnson planning to visit columbia university right here in new york today, to meet with jewish students and discuss antisemitism on america's college campuses as donors weigh what to do and whether to withhold money and try to use their influence over this issue. meantime, take a look at future, dow off about 31 points right about now. nasdaq up about 95 points. the s&p 500 up about 5 1/2 points to dom chu with a look at this morning's premarket movers. >> andrew, joe, becky, let's start off with late breaking earnings news of the morning so far. shares of hilton up 2%, around 2,000 shares of trading volume this is the hotel operator behind its namesake brand and other brands like waldorf astoria, embassy suites and double tree amongst others profits and revenues came in better than estimates. the beat and raise was driven in

part by growth in the operating and financial efficiency versus room capacity. something known as revpar. that helped offset drags from bad weather, renovations and holiday timings during the quarter. the hilton shares up 1.75% from hospitality and leisure to toys and games hasbro up nearly 4% right now, thinner premarket trading volumes. this is the company behind toy franchises like transformers, also gi joe, also games like monopoly and dungeons and dragons. it offset lower demand from some toy products hasbro shares up about 4%. we'll end with a big driver for the broader market, especially when it comes to that tech and tech-related trade, that's tesla. shares motoring higher if you will by 12%. just other 2.2 million shares of volume

earnings and refvenue came in sh of expectations, but there is optimism about tesla's plans to accelerate the launch of new models of cars, especially those targeted at lower price points some are getting more positive like those at bank of america, theyup upgraded that stock fro buy rating to a prior hold and they cited the potential for more positive catalysts down the line keep an eye on tesla, big driver of the tech trade. back over to you >> dom, thanks. fed officials and wall street economists engaged in a critical debate over the recent boon in productivity and whether it is here to stay the answer could impact everything from inflation and that outlook to interest rates to how we all live in the future you finally decided to delve into this. senior economics reporter steve liesman joins us. >> it is a big deal. i wish i had better answers, but i think i have good stuff on the debate. >> we have obliquely mentioned it a lot >> that's the end of my story. i want to talk what y'all are doing about this let me do this story.

>> we're not helping productivity. >> then i'm going to compliment you, joe maybe not you, but i'm -- i'll get there. hold on. when the gdp number comes out tomorrow, wall street is going to pour over the spending and the inflation details, looking for the clues about the economy. but what it won't see is maybe the most important number of all, the underlying productivity data for the economy the growth in the economy's efficiencies often the biggest part of growth and it has been booming. look at this data here for the five years before the pandemic, grew at a trend like 1.4% from the beginning of the pandemic through first quarter of last year it dropped to 1.3%. you had a huge surge at the beginning followed by a really worrying decline, people thought we're in a downtrend but the past three quarters off the charts 3.7%, which is double or more the long run average here. the boom has launched a debate taking place alongside the inflation debate about whether it is a real or a blip the consequences as austan

goolsbee said last week are far reaching >> that's fundamentally going to change everything about the economy, in a way. and it would have direct implications for monetary policy it would put us back in an environment that would very much be like the late '90s, where you could have faster wage growth without inflation, could have faster gdp growth. >> we have had really nice productivity in the last year or so, but it is probably still very much affected by the post pandemic factors that we're seeing i think we need to see more to understand whether there is a longer term -- >> here is what the skeptics are saying, it is all noise, because they like to look at productivity over a five-year span there is work from home they think that may be distorting where people aren't reporting the hours worked, being mismeasured, they say it is too soon to tell. they're saying work from home say source of greater efficiency with better matching of employees with jobs.

companies are learning to do more with less in the inflation fight during the pandemic and the higher growth and inflation has led to that higher productivity, mother being necessity of invention for the fed, higher productivity could mean lower for longer because it is like a long-term positive supply shock. it is like adding factories and workers without really adding either but getting there could be tricky, could mean more demand for capital, which could mean higher for a shorter time until the positive effects take hold what i wanted to say at the beginning was i'm watching every single interview you're doing about a.i., and with company ceos as part of the reporting of the story, because, remember, we're not looking for productivity growth. we get that. 1.5% is about what we do we need to know if the growth rate is increasing so think about, like, a pc or a chip, right, cwhich grows -- the speed increases at 1.5% a year if it grows by 15%, what is that

that's like ten years of improvement in a single year what we want to know is the rate of productivity or efficiency increasing that's what changes everything >> can i just add, jamie dimon, we were talking about his comments in new york earlier, he talked about a.i he said they have 400 uses for it already rattled off things like risk, fraud, marketing, idea generating, they're already using a.i., it is embedded into that stuff, they have taken -- they took a woman and put hadder in charge of all a.i. and she directly reports to jamie dimon, and i think companies taking and doing things like that are going to start super hyping up the actual -- >> i don't think it is here yet. >> i don't think a.i. is part of this at all yet. that's my opinion. >> you know the only place, college students have more time, because they don't have to write any papers. >> absolutely true. >> i ask you, great interview with anthropic yesterday, what can i use it for and you racked your brain and said on draft kings i might be able to --

>> that's the most important question it is not just -- tell me about this whiz bang technology. tell me what it is used for, how it is going to work its way into the economy and how we live. >> i can tell you how to use it. jpmorgan is using it to some degree, but i don't think it is taking jobs away just yet. but we talked about actually in finance, anybody or in marketing or anybody who is making a deck, you know, a power point presentation. >> for a merger an acquisition. >> for any kind of time you make a presentation to anybody, you know if you're a marketing company that has to try to come up with different advertising, or pitching different things, all of those -- all the time that is wasted taking your idea and your brain and trying to put it on paper and make it look great, that is -- that's where today the time can actually be impressed. >> that's the argument for not being as mad as i am about college students using this. they have to figure out how to use the a.i. tools because the

workplace. >> instead of getting my roommate to write this you almost did an on the other hand segment of jon fortt. i'm in the skeptic camp. i think it is post pandemic money still around and jamie dimon said, fiscal spending, if you spend trillions, consumers will have more money and -- >> that's a good point. >> can i just provide -- >> now you're going back to the other hand. >> i want to offer investors a way to think about this the way economists door to what it is worth, there is a guy, robert gordon, a very skeptical person when it comes to technology. he looks at this and says, okay, yeah, this stuff is good, but is it any better than the other stuff we had before? does it replace or add to the -- but he's smart in the following. so the point is from an investor standpoint, don't get overwhelmed by how, you know, the whiz bangery of it, because it all looks great, but does it really add to how efficient we

are as an economy? don't get overwhelmed of it, be skeptical of it. >> i think this is possible, a.i., but i don't think it is happening. >> i don't think this is a.i i think what we're seeing now is something completely different >> they look totally productive. >> i guess the debate i was talking about is the debate we're having now there we go. nice job, guys >> they don't have to do the paper, they can go out and demonstrate. >> that's it >> when we come back -- >> ask jason about this. >> we're awaiting results from boeing they're expected around 7:30 a.m. eastern time. up next, though, we have former council of economic advisers chairman jason furman. he'll talk to us about why the biden administration's student loan forgiveness plan could make loan forgiveness plan could make inflation worse and we'll as - so this is pickleball? - pickle! ah, these guys are intense. with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk.

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all right, welcome back. the biden administration published its new student loan forgiveness proposal following an earlier supreme court rejection on their first round attempt. our next guest says the plan is poorly targeted and will make inflation worse. joining us right now is former council of economic advisers chairman jason furman. an economics professor at harvard's kennedy school of goof government, we should point out you were in your position in a democratic administration, so you were speaking out against what a democratic administration is proposing to do right now what are your problems with it >> look, we have unsustainable debt we have high mortgage rates. we have an economy that has not landed softly. this is a plan that we have only heard estimates for part of the cost of it but when you take the plan as a

whole, it is likely to be 250 to $750 billion is that a quantitatively huge contributor to the problems i cited? no is it moving in the wrong direction on all of them yes, it is and we shouldn't be doing that right now. >> i have seen arguments out there that say, hey, what are you talking about that this costs anybody any money. all it is is we just say, poof, it goes away, nobody has to pay this and it doesn't result in anything >> yeah. i mean, there is, like, all sorts of magic fairy dust, pixy dust arguments out there they're not arguments we give anyone a passing grade in my classroom. the goal of this is to raise consumption. and in fact i've seen analysis, proponents of it saying this will increase consumption. consumption right now is really, really strong. you make it stronger and that's what puts upward pressure on interest rates, upward pressure on inflation,

and, of course, this gets recorded as an increase in spending and ultimately a higher path for the debt. >> there is a problem with the cost of college these days and having students who get out with 100, 150, $250,000 in debt is a serious issue. how should we be addressing this >> i think this is a serious issue. if you look at where the defaults are, they tend to be people with actually lower amounts of debt, a couple thousand dollars they can have defaults that stay with them for their life, so you have the administration that already did an income driven repayment program, people with low incomes that were struggling to pay back the debt this is on top of that i think what you need to do is target the people who have been the most unlucky, or gone to colleges that really ripped them off and this is 30 million people this is very, very broad it is not very targeted. that's what i see the issue is and, finally, you know, probably would rather have congress weigh

in on issues >> you got, jason, other issues maybe with some -- i'm going to bring up this capital gains proposal, and then i haven't talked to you, i don't know whether you think 44.6 is too high, but i have heard anecdotally that not everybody from president obama's administration is pleased with some of the stuff that is happening now in the biden administration is there any scenario where you would -- that would be the highest rate since its creation in 1922, do you think that would hurt capital development or deployment at 44.6%? is that a good number for you? >> look, i like the president's budget we have a lot of problems in our fiscal situation, if you pass the budget in its entirety, we would be on a path of less debt

than the path we're on now you have to make tough choices on taxes look, the best tax system, if we didn't have any needs in our country, would be to not collect taxes from anyone. every way of collecting taxes has some downside or trade-off but overall, i think they have a broadly responsible budget and i'm quite enthusiastic about it. sorry to disappoint you, joe. >> it disappoints me greatly. >> we were batting around the noncompete news this morning out of the ftc and the impact on labor, employment and potentially wages longer term. lina khan saying this will the rebillions of dollars in new wages. do you think that's the case. >> i like the idea of banning non noncompetes for many classes of workers. i wish they built in some exceptions there is a legitimate purpose for them but i think this probably will improve bargaining power for

lower wage workers and i'm enthusiastic about that part of it the ftc's specific estimates, i don't know you do need to take into account, for example, sometimes you have to compensate people more in exchange for a noncompete and work out those types of dynamics as well. but step in the right direction, maybe goes a bit -- overshoots that right direction a bit >> jason, you know, i've quoted you a bunch of times on the air in the past week because you tweeted out -- i think a week or two ago now, that if, in fact, the federal reserve raises interest rates, i think you were suggesting in this calendar year, you thought it would be a function not of inflation going down, but actually of an employment problem in this country. >> cutting rates >> cutting rates i'm sorry, cutting rates i thought that was a very sort of provocative view on whether you think that actually will come true. >> yeah, look, i mean, you have

the sort of monkey's paw situation here there is all sorts of people wishing for a rate cut if that gets delivered, it may get delivered because the employment situation deteriorated i think a cut in december would be possible. based on lower inflation but before then, you had a fed that has been repeatedly burned by thinking inflation had come down and it reasserts itself i don't think you're going to be able to have one, two or three months of low inflation that are reassuring after the three really high months we just had so, i don't think there is going to be enough time to build enough confidence that inflation has come down to justify lower rates. i'm not predicting a downturn in the economy, but it can turn on a dime if that happens, then i think the fed could be there to help rescue it. >> something breaks in the economy beyond just -- >> since the h word came up, i

can't remember, are you across the river, are you in cambridge? >> i'm in cambridge. >> kennedys in cambridge. >> an office in the economics department too. >> something is happening in the yard, i can't remember what it was, or you're not -- >> yesterday there was, like, huge gatherings of students playing spike ball and frisbee when i was walking through the yard. >> there is some concern as well and here we go again, jason, and i just wonder, at this point, i don't know why it is happening, how it is happening, but it seems like there is kind of an epidemic among college presidents of a group think about, i don't know, palestine, antisemitism, how are your -- do you regret sticking your neck out for claudine gay at the time when it happened in hindsight now, don't you think there is a serious issue at the top of these ivy league schools? >> i think she certainly made

mistakes i didn't defend her on the plagiarism set of issues, which i think are real issues for her as the president of harvard. as far as her testimony at the time, yeah, she did a bad job, all three of them did a bad job, i'm positive she's not remotely antisemitic. i think she did a lot of things right in a difficult situation i think it would have been a mistake to push her out of harvard over what happened in those hearings and, look, right now, most of ur students are focused on learning, they're focused on studying, and they're focused on playing spike ball we have students with real strong passions, that's a fine thing too. there is ways you can express those passions and ways you're not allowed to express those passions but, you know, a healthy debate following a set of time, place and manner rules on speech is what we should be aiming for and what, for the most part, we

have, not completely, of course. >> jason, very quickly, i don't know if you heard our conversation with steve liesman before, talking about productivity gains, whether you think this is the beginning of a longer term trend, what we have seen over the last three months, or if you think that this is a temporary thing that is pushed up by something like additional spending from the government what are your thoughts >> i think there is a real possibility of a productivity revival in this country. i think if it happens, it will be more like on a two to ten-year time horizon. so it won't be relevant and helpful for the fed and what it is facing right now. the data the last three months is pure noise. you measure productivity over the last two years, and it is up 0.2% you measured it over the last five years, it is up less than forecast prior to the pandemic so, i don't -- what we're seeing in the data is just noise and postpandemic gyrations what we're seeing when we read about what's happening in a.i., the developments, the

technology, i think that's real. it is not in the data yet. it is not in the economy yet in a huge way i think it will be, just not here to rescue us from this landing issue we're facing now >> jason, thank you for coming to play and taking a range of questions from us. it is great talking to you. >> great talking to you. >> thanks. coming up, as we just mentioned, the federal trade commission cracking down on noncompete agreements, banning their use by employers the agency may have a fight on its hand we'll talk about that fight when "squawk box" returns after this. >> announcer: time now for today's aflatriac iv question. which state currently has the lowest average price for a lowest average price for a gallon o helped pay for medical expenses, groceries, rent. it really helped close that gap. go, go, go! yay! go aflac! go duck! the answer when "squawk box" continues. at aflac.com wish we had aflac on our team.

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>> announcer: now the answer to today's aflac trivia question. which state currently has the lowest average price for a gallon of gasoline the answer, mississippi. the average price per gallon is $3.09. welcome back to "squawk box. the federal trade commission banning employers from using noncompete contracts it is now official eamon javers joins with us the latest en what is likely to be a big fight on all of this, eamon. >> this is a sweeping change in the way america does business. the federal trade commission voting yesterday by a margin of 3 to 2 to ban almost all noncompete agreements in the united states. the ftc chair lina khan saying

the reason is that noncompetes suppress wages they stifle innovation, and slow down new business formation. and she said, the new rules will free american workers to pursue their dreams and create new dynamism in the american economy. the ftc says that about one in five americans or about 30 million workers are subject to a noncompete clause, one that they often had little choice but to agree to, and they say that those agreements have become increasingly common in low skilled, low paid roles. the ftc says the rule will lead to new business formation, growing by 2.7% each year, leading to more than 8,500 new businesses created each year the measure, as you say, it is not a done deal, just yet. it is set to go into effect in august but the u.s. chamber of commerce and other groups are expected to file lawsuits to block it, so enforcement may not take place for years if at all.

opponents here argue that the ftc simply doesn't have the authority under the constitution to make such a sweeping change and that congress should have to pass a law if it decides it wants to undo noncompetes across the board nationally this applies to all existing noncompetes as well. so, in most cases, if you have a noncompete agreement in your contract right now, that will no longer be enforceable when this rule goes through. senior executives who represent less than 1% of workers can still have existing noncompetes in place, but employers will not be allowed to impose new noncompete agreements, even on them, once the rule is final one other thing, guys, employers have to notify employees who have noncompetes that those are no longer enforceable once this happens. so, in august, if this goes through, you would imagine getting a notice from your employer saying, by the way, you're free to walk if you want to >> so, a couple of questions,

there is this $151,000 threshold and this policy piece in terms of what the role is that you may have, and i think you have to have both. how are those things going to be defined. and to the extent there are folks who get paid less than $150,000 but have stock locked up, one of the questions that has been asked, just in the past 24 hours by a number of folks, i think on wall street and elsewhere, that have stock locked up, but less than the $150,000 salary, what happens in those types of contexts? do we know >> that's a good question. i don't know, andrew, on stock lockups. that's fascinating you know, look, this is designed to be a sweeping ban on noncompetes. it is in most cases is what the ftc is saying. i think one of the questions you have to look at is, you know, broadly speaking for the whole u.s. economy, does this improve wages for workers or are these negotiations sort of built into

these noncompete deals so that if i have agreed to a noncompete, my salary is higher and will you now see employers try to lower the salaries on people where noncompetes are no longer enforceable, saying we paid you an extra bonus so to speak to have this noncompete, and now it is not enforceable, we're going to lower your salary. >> the restricted shares become compensation once -- if you walk away before it, you don't get it so, but if you get it, it is taxable income and you have to report it to the irs, i would think it would follow some of the same irs rules, somewhere along the way. >> right look, the other thing the ftc says here is one of the big arguments that employers use to encourage noncompetes is they say, look, we got to protect our intellectual property. we can't have people walking out the door with their brains full of our information, that's not great. we have to protect that. what the ftc says is you can use other things to protect that

kind of information from walking out the door you can use nondisclosure agreements, those, of course, still valid. so someone signs a contract, they have to agree not to disclose certain irnt ntellectu property that's valid too >> -- enforce a nondisclosure agreement because you have to go to court effectively, arbitration, depending what happens, then it is to prevent them from going elsewhere and that's the push/pull of this, right? >> and the interesting thing is what happens in august, right? even if this is in litigation, if the u.s. chamber files this lawsuit, which we expect that they will and others, you know, do these agreements sort of effectively become unenforceable in august anyway and see a barrage of employees working out the door, saying, you know, okay, go ahead, sue me that's fascinating >> thank you boeing releasing quarterly results. let's get over to phil lebeau with those numbers phil >> becky, this is a smaller than expected loss from boeing for

the first quarter, losing $1.13, the street was expecting a loss of $1.76 revenue coming in better than expected but other than that, these are ugly numbers for first quarter not surprising given the situation with commercial airplane deliveries being dramatically lower free cash flow, negative $3.93 billion, operating margin 0.5%, negative 0.5%, negative 0.8% in the first quarter of last year commercial airplane division lost $1.14 billion, well above what they lost last year in the first quarter. the commercial airplane revenue found 31%, not a surprise, again, given the limited number of deliveries compared to last year boeing defense unit perhaps a small bright spot here, with a profit of $151 million there is no guidance for the rest of the 2024 and in terms of

the long-term guidance it not in the earnings release, but we asked the company if they're standing by the target of $10 billion in free cash flow by late 2026. and the company says, yes, they have not pulled that guidance, that is still there. one of the many things we will be discussing with david calhoun, coming up on "squawk on the street," you do not want to miss our exclusive with him, we'll talk about the state of the business right now it is in flux as everybody knows. and we'll get an update for him on where things stand on the ceo search as well guys, back to you. >> very good, phil thanks for that. check out the shares of biogen, they're higher after the company reported better than expected quarterly profit, helped by increasing sales for the new alzheimer's treatment. "squawk box" is coming right

back

welcome back to "squawk box. new this morning, the uk's competition and markets authority seeking comments from interested parties on whether the partnerships between big tech and a.i. companies can impact competition in the uk specifically it is focused on

microsoft and amazon and anthropic. this is the first part of an information gathering process and doesn't mean formal investigation will follow. in response, amazon says it is unprecedented for the regulatory to review a collaboration of this type. we talked to the ceo of anthropic about this very issue yesterday because a similar thing is happening here in the united states with u.s. government taking a look at the role of these partnerships between openai and microsoft anthropic, google has a relationship with amazon, what those things mean and whether they are work arounds to some degree, what may have been a merger of sorts, of course, the ceo in this case of anthropic saying they're completely independent, there is no board representation, which is different than the way openai is set up, for example, as it relates to amazon. coming up on the other side of this, rockefeller international's ruchir sharma bhe and talk about why an economic downturn could be

coming sooner than expected. you don't want to miss this. come on back

our next guest has an op-ed in the financial times titled the overstimulated super power

basically, positing that the economy is overheated and a slowdown could come faster than expected joining us now, ruchir sharma, breakout capital founder and cio, his new book "what went wrong with capitalism" comes out in june. good to see you, ruchir. and i guess you can tell us exactly what your point of view is here, but we're all aware of what happened after the pandemic in terms of fiscal and monetary, what you would think is overstimulation. >> yes, joe. i think what was exceptional is part of the u.s. economy is concerned was that the u.s. government and the central bank you can argue kept stimulating well after the pandemic was over so, compared to europe and japan, the u.s., i think, runru running fiscal deficits far

higher than those countries did. last year in 2023, by most accounts the external amount of government spending alone accounted for one-third of the entire xik economic growth in te united states. the other country and the monetary stimulus during the pandemic and then tapered off, the u.s. government in 2021, '22, even last year, 2023, three years after the pandemic was over kept on stimulating and the result is we have massive fiscal deficits, a big burden now in terms of the share of gdp, which is behind only japan and italy, and the u.s. has been exceptional and so is the amount of monetary overhang in the economy. look at aggregate like growth, those are yet to return to trend. after three years of the pandemic it shows you how it is countering a lot of the fed's interest rate hikes as well. >> yeah, so it kept growth,

ar artificially high. it is responsible for that also, you do blame it for inflation, for both asset prices and for consumers. all i'll say, ruchir, is that many argue that we're the envy of the entire world with the economy that we have right now and if you're looking for policymakers to learn a lesson from what you're seeing, we're learning a very bad lesson right now, and that is that it works, all of this printing and all of this overstimulation we have not -- nothing has come home to roost, so, you're not right yet. >> absolutely. i lived through many cycles. the last one being what happened in 2008, 2009. at that point in time, the economy, which seemed to save the world and was the envy of the world was china. chyooin

china massively overstimulated after that if you go back and read the press commentary, for over a decade, china was the envy of the world. here we are a decade later and china is paying the price for it they don't know where to go. so the point i make with the united states is that, yes, the united states has a lot of strength including what is happening on the a.i. boom on the tech front and it should be the envy of the world, but this is a multifactor model the point i'm making is that the exceptional growth we're seeing compared to the rest of the world -- it is because of these opposition factors and we -- >> i know how you write a book, you want it to be sort of -- has a catchy title what you're describing when you say -- your book is entitled, coming out soon "what's wrong with capitalism," every yothingo talked about is not something wrong with capitalism, it is

something wrong with policy and government i think it is behind the scenes something you're seeing in the -- i haven't read the book yet, obviously, but, i mean, capitalism is done right, i don't think you have problems like this. but it is not necessarily done right when the government gets involved >> that's exactly the central point of the book, which is that capitalism did not fail. it was ruined. it was ruined by the fact that if you look at the suite of government interventions over the last few decades, it has expanded in every which way. it expanded in terms of the number of bailouts, in the number of regulations, 3,000 new regulations that comes through every year so, what i argue in the book is that the capitalism we have today is a very distorted form of capitalism and this is not what the founders had in mind. and the share of the government and its role in the economy has expanded significantly so, that's the central point of the book, yes.

>> i knew it i knew it, ruchir. we had you on before, and but the way it sounds, it could have been the same as joe's book, which we had on yesterday. "the road to freedom," either the road to freedom or remember the first one, the road to surf dom. >> exactly yes. it is coming out on the 11th of june we could talk more about that extensively then that's a good point. it was ruined. >> i'll give you a couple of hours if you come in i'm not in a position to allow that, but i would. ruchir, thanks. >> thank you >> like we're going to overrule that, no. >> you're going to let him come in for a couple of hours >> yeah. >> on this >> tesla shares getting a boost after elon musk says more affordable evs are on the way. but will that be enough to put a charge in demand

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welcome back to "squawk box. elon musk defended the ev growth yesterday reporting lower than expected earnings. take a listen. >> see the ev adoption rate globally under pressure, and a lot of other watermain going back on evs and pursuing plug-in hybrids instead. we believe this is not the right strategy and ultimately we'll dominate the market. >> elon announcing tesla starting production by early 2025, evs. investors cheering the news. joining us, former tesla president. good morning to you. >> good morning. >> so tell us how we're supposed to think about this. a lot of investors looking at both the sales piece, which is decline what's happening in evs. the bulls saying, this is great news that the lower-priced vehicle may be coming.

unclear of the timeline. robo taxes apparently part of this and a capex piece of this how much money they'll actually intend to do this. seems pulling back a little bit on some sort of big plans to sort of completely remake these factories and sort of taking a middle path in terms of using some of the facilities they already have is that a decent summary of what's happened on that call >> a decent summary. kind of two contrasts yesterday. gm earnings before the market. tesla earnings after the mark. gm did a triple beat, and they are getting through their production issues now ramping evs. whichy a think creates demand challenges for tesla, because there are so many now ev industries coming to market. so i think they are having to answer the pressure to have lower cost evs. >> right. >> same time, they're trying to move the story to the economy

and the longer-term -- >> for the investors, though, today, speaking about tesla. do you have to think about it? he's made the case you have to think about it as an autonomous vehicle company long term,s to capture valuations where even tesla sits in terms of the stock price today >> yeah. a little, hey, look over here, when the core business is weak recast a different story i think a little bit of that going on for sure. because their core business is weak and straightforward about that i think, yeah. the support of a valuation you've got to believe in this recast, into autonomous. >> straight up do you believe it? >> i think there are already two companies doing driverless cars, and so there's a race where two are already out there. >> right. >> and tesla, if they can get to be the third i do believe cars need to be autonomous ten years from now. probably you won't buy a car if

it's not. >> ten years from now. the question is, given there are already vehicles, they have a total kind of radar, lots of other sensors. a very expensive process, cruze and the like >> yeah. >> can tesla do it with the tech stack already on the vehicle, to say elon said repeatedly he wants to do it with cameras and processing power >> the big question. waiting since 2015 for the finish line to arrive. the finish line keeps moving out and out and out and people as they work on the problem, 95% done the last 5% like as big as the first 95%. where that finish line is, when we get there, tesla or others, i don't think anybody knows, but closer than we've been. >> in terms of these more affordable vehicles. >> yeah. >> do you think those will compete well against what you're seeing out of gm and these other

carmakers? >> i think you need lower -- got to open the market and the big and broad market is at the lower price. in a couple months can buy a chevy equinox after tax incentive, a 300 plus low-range car. smallest ev. a number of those vehicles coming out i think that's going to be formidable kempcompetition for consumer. >> more concerned about the idea even, the ev adoption is not staying at pace? right? i mean, that's the -- the sort of bigger overhang of the whole situation. are people going to hybrids? going to stick with combustion engines? what's really happening here >> like we awe knew the first quarter was happened what happens first quarter most manufacturers lost the tax incentive credit now back i think we're going to see different numbers coming out of the rest of the year, because it was a slow first quarter

consumers know they wait a few weeks or months -- >> wait get it or just this market doesn't work without government incentives? >> if they -- a little of both make evs affordable. so the government's helping. while the car manufacturers bring prices down and costs down those cost-downs are happening when you have, like a chevy volt, and that's priced in the 20s, you've got a viable car without tax incentives even more viable with tax incentives. >> and a car manufacturer, or a car sales person, group one, who heads all of these car companies, consumers really want hybrids, to, walking in there. >> a different between hybrids and plug-in hybrids. more expensive than gas. doesn't answer the cost issue. plug-in hybrids, a range, most people drive every day, with a plug-in hybrid you'll see peopleleaning into plug-in hybrids where gm is.

>> what do you make of the political divide among evs talk to leaders, rate of states buying ev is not a palatable product, that this has been so politicized that there's a view that it's like having a bumper sticker on the back of your car. if you drive an ev, for certain type of person, that's a bad sign and for a certain kind of person it's a good sign and maybe splits across political parties in some ways do you believe that? is that actually happening >> i live in a purple state on the red side of the purple state. driving a chevy silverado ev it's got 460 miles range pull up in the grocery store, hardware store parking lot and get questions. what is that thing is it full-size, how much range do you get can i look at it so i don't get that vibe from the farmers and ranchers that are -- >> you don't believe the sort of --

>> they're not saying, i'm not interested in this because of my political views. they're genuinely interested. >> and energy information administration and biden is estimating, what, u.s. cars, pertage by 2050, electric. do you know what their estimate was? >> figure it's moving around a lot between 50% and now down -- >> 12%. >> already at about 8% so i think it's a layup to go from 8 to 12 between now and 2030. >> this is 2050. >> oh, i don't -- i don't think. >> what the biden administration is saying. not from a red state person. that's from -- >> i think the car manufacturers have very different screw viewsf that market. >> yeah. >> ev market will be -- >> sales at 14% of total sales 14% by 2050. according to biden. >> right i think -- right now i think -- wrong about it

by 2050 for sure look at our countries with a head start in this race, china at 40% norway at -- 50% germany's approaching those numbers. so i think -- i think that's -- it's going to be far sooner than 2050. >> finland is the happiest place on earth. >> it is puts me at eat. >> thank you appreciate you being here today. >> thanks for having me. >> great to have you here given your experience at tesla and we've got a quick programming note tomorrow tesla investor ron baron our guest and we'll discuss with him. 8:00 a.m. on the east coast. you're watching "squawk box. i'm joe kernen along with andrew ross sorkin and becky quick. senate sending a $95 billion aid bill reports say ibm is in talks to buy cloud software maker, and

that stock jumped close to 20% yesterday on that news. that hashish corp. or -- i might invest in that >> okay. right. yeah. >> and tech giant oracle moves headquarters to nashville to be closer to what's become a health care epicenter in the u.s. oracle already moved hq from silicon valley to austin, texas, a couple years ago, in 2020. >> a look at futures on this wednesday. right? it is wednesday. wednesday morning. a look now you see the dow looks like it's still indicated off. only by less than a point at this moment. s&p futures picked up. now indicated up by 12 and nasdaq up by 118 if you're watching the treasury market you'll see that the ten year now yielding 464. two year at 494 and we want to check in with dom chu for a look at the morning's pre-market

movers a wild guess is it earnings news driving things today >> becky, joe, andrew, yes earnings bonanza driving our wednesday morning movers here. so to becky's point, start with tesla. you just talked about. arguably driving a lot of market narrative especially the nasdaq. 12% higher electric vehicle giant posting actually worse than expected quarterly profits and revenues but optimism helped by confirmation that the company will accelerate plans to rule out new vehicle models including a march ore affordable option and elevated stock from buy to neutral citing things potential for more positive catalyst rest of the year. more on that story, top calls of the day, subscribers head to cnbc.com/pro for a more detailed ana analysis late-breaking news this past hour, aerospace boeing, dow

component, shares 3.25% higher it reported a smaller than expected quarterly loss per share on better than expected revenues also reported a smaller than expected drawdown on its free cash flow than analysts feared boeing saying its stabilizing its supply change reducing production rates on top-selling 737 max model jets in the wake of that regulatory scrutiny over quality control issues. tune into "squawk on the street," exclusive interview in the 9:00 a.m. eastern hour and end with of you roughly 4% telecommunications giant with a mixed quarter. profits beat expectations. revenues fell shy of the mark. at&t managed to exceed expectations for number of wireless phone subscribers added and posted better free cash flow

as well. that free cash flow, of course, very scrutinized by investors hedging fund at&t's big dividend payments current levels, a dividend yield around, get this, 6.7% just to put it in perspective, roughly five times higher than the broader s&p 500, becky send it back to you guys. >> great dom, thank you very much meantime, meta reports quarterly results after the bell today. joining us right now with a preview barton crockett, rosenblood senior securities analyst. barton, meta on a tear not just the stock, looking at growth of the company's earnings, too. something you think is sustainable? >> certainly, i mean, they're in a tremendous place now i think in the first quarter growing advertising 27%, what they model growing at like 24% fourth quarter. that will be the fastest growth any of the major kind of

internet complex, amazon growing 25%. google consolidatedly growing close to 8%. so really big and growing massively. the comparisons get tougher for them as you move over balance of the year growing spending this year it is going to be a real test, a gut check to see do they have ability to compound big growth on top of big growth with big numbers? our bias, favorably, making great investments in a.i.-driven marketing tools. if anything, around tiktok, this helps them well positioned even after the great performance. >> why do you think they are going to see the most growth in the ad market versus all the big tech competitors because of those a.i. tools? >> i think that is a big part of it they've been investing at scale. direct marketing focus machine learning, a.i.

you know, something they seem to have built a better mouse trap than the incremental dollars moving their way growing farther than social media peers. that speaks to the product this is a direct marketing-driven marketplace for them it's results driven and getting the money because marketers are getting results. >> can you weigh in on a broader conversation having through the morning. talking productivity, growth seen in the last three quarters, sustainable, real, caused by government spending? whether something to do with a.i. i know a lot of places haven't seen huge uses for a.i., but jamie dimon from jpmorgan talked they're using in actively in 400 different use cases, fraud, marketing idea generating. moderna a big story in "wall street journal" doing a deal with openai hoping to by end of

the week have the chatgpt schable to all employees how they see that building things for direct development. you're talking how meta is outstripping and outgaining competitors in the advertising space, because it's using a.i. tools, too do you think a.i. tools are used broadly enough to actually increase productivity at this point? >> look, i can't say that i've calculated numbers on that everything i have is anecdotal feels like potential there doesn't feel in the companies alook at it's been realized broadly and outside of what we're seeing with meta but certainly amazon's making a lot of noise cloud service providers are leaning into this and tons of innovation and experimentation and i think that this is, you know, moving beyond kind of a chatbot that would amuse you and help you do your homework to

something getting stitched into your everyday kind of business activity and people are doing it well and peel doing it less well, but on balance i wouldn't be surprised if we look back in a couple years and it's meaningfully helped the macro backdrop. >> thanks for your time this morning. >> thank you. when we come back, the chief equity strategist, not andrew, calling the rally. barry bannister call on the market we'll be right back.

next guest, we've pointed out, quite a bit, accurately called the rally last year really lonely. says he's now very cautious on the market this year in favor's value over growth stocks barry bannister chief equity strategist steeple i can vouch what i just said on

the air. that did happen. at stifel's. >> better at bottom fishing than top ticking. my nature. we have had the view since last year that 2022 to '23 actually had a recession. if you look at a recession, income, production, sales, employment and fixed investment. only thing didn't weaken employment, structure of labor had a recession in everything else real retail sales. we're recovering from a recession, which is why you've had a burst of productivity after recession. >> not a classic -- >> we call it pseudorecession. a major slowdown like the mid-teens. one in the '80s. one in the '00s. because of that actions in the

market very much like a postrecession. caught the fed off guard the economy came back. >> by does that make you less bullish? >> think about it, the yield curve is inverted. meaning short rates abrovove log rates. i think the curve will flatten i think the long rates will go up five was the norm before the financial krcrisis in '08. of the five year we'll see five again i think the problem is messaging they'll cut a little bit greenspan and bernanke took over for greenspan kept rates at about five the fed can cut a little bit manage it. like course corrections but can't really whack rates like in the last decade. >> your view whether stocks continue to perform well is based op whether the fed cuts or not?

>> no. fed is extremely important. rates driven, second delivery, machine. we think, just thought valuations some of the internet -- excuse me the a.i. hype a little overdone. looking for 10% correction off march 28th down to about 4750 on s&p 500. trade around these ranges. >> e okay, earnings, multiple already as good as it's going to get? >> had a minor earnings recession outside of tech. negative outside of just -- >> better now, aren't we >> yes you're seeing earnings, employment, these arela late-cycle phenomenal. after the pseudorecovery, fed has to be on guard. >> interesting correction earnings goal up 10%. >> just it earnings probabl struggling to do 10 this year.

interest rates have -- normalizing of interest rates is up gets complicated has to do with r star neutral rates, term premium, but generally speaking, we think a higher rate environment long-term. multiples elevated on some hype. >> you're not, hair's not on fire about inflation being worse than we're expecting fed's going to have to actually tighten down the road? instead of cutting you just think we got ahead of ourselves? 0 pe 10% corrected back on track after that >> post-world war ii, 3.7% year over year. 3 looks sticky at that level on headlines. core pce inflation the fed watches is about 2.5%. that core pce in the world, fed thinks depending on growth potential of the economy got to keep rates a little closer to 5

than 4 that's what the adjustment is. long end will be higher than the short end. the short end higher than what people are used to. >> when will you be as bullish as you were last year? >> we'd have to have another bear market. i do think there will be a brit of -- bit of a term premium shock. people will realize next yeesh economy is bumping up on resource constraints inflation will bottom up have he leaves orange, powell hiking rates and market sell off. another great entry -- >> you think 20% down? >> yeah. probably more of a 2025 story, though. >> do 10 this year >> 10% correction. >> no, no. rally back think back to the end of the year going to have a relatively resilient economy and what we've focused on call it cyclical

value. a broadening out into financials, industrials, energy, basic materials, industrials, some already moved we think it will broaden out fourth quarter and less tech sin tri tech centric. >> i was kidding, caddying. >> a lousy caddie. talking all the time instead of -- >> a lousy golfer. >> no. >> i know he does. >> a tennis pro, a college golfer, too. >> she's good. >> ever visit the park, stifel. >> offices everywhere. >> not everywhere.

>> i'm based in the sarasota office. >> are you that's rough. >> one of our branches one in downtown sarasota, venice, in tampa you can choose where you want to work. >> a quick out, barry. thank you. just used -- think of the way you see coach k's name basically the same right? >> yeah. >> all right. (grunting) at morgan stanley, old school hard work meets bold new thinking. (laughter) at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. old school grit. new world ideas.

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box. our next guest says the bankening company is back to being a boring business. that is a good thing analyst at wells fargo a lot to discuss about the banking business including travails of citi group and other institutions you've got something in your hands. >> yes >> what are you holding? >> well, citigroup is dominant number one pick. and what i say here is -- let's go citigroup reorg take 13. take 13. 13th restructuring. >> lucky 13, is what you're saying >> for citigroup everything is a little upside-down this time, it's different for citigroup. finished seven months of what

they call a cyclicification. people say implode, lose revenue, crusustomers and best first quarter. beating expectations by one-third. top line, bottom line and going really well. maintain the best of industry guidance for 2024. guess what next three years, earnings doubling. >> right. >> goldman sachs, upped 70%. no other bank up 50%. >> stock, call it $62 for now. you think 12 months from now at the rate they're going, call it 24 months from now, given your long-term outlook for the company, it's what >> we have earnings going from $5 a share last year to $10 a share in 2026. over double-digit return on equity haven't seen that for a while. gets them to tangible book value, which means a double in citigroup stock somewhere around $ 110 to $120.

>> by end of when? >> 2026. two years, three quarters away. >> and direct -- put it up there so everyone can see. take 13, director is mike mayo so we're clear date is the present. okay see if you have to come back and erase, take 14 and what it actually says. >> it's difference this time, this restructuring is creating five lines of business it's services, banking, markets, consumer and wealth. this is similar towhat proctprocter & gamble did five years ago. wells fargo, chris kerry and citigroup five lines of business more transparency, accountability -- >> very competitive businesses already. the wealth business is a competitive business. >> i can see wealth. 10% of the company i don't know where that's going to go. they say going to improve.

80% of the company is very well positioned at citigroup. you have global payments, services business. best in class. 25% of the company markets and banking as you know top five global investment bank and top three credit card player that's 80,percent of the company. those people saying citigroup, never own it that's wrong okay the companies restructuring -- >> every bank out there, your topic? >> mydominant topic. look, i recommend -- >> number two and three pick now? >> goliath is winning, working bank of america and jpmorgan number two and three pick. tied they are benefiting from the diversification, not too much commercial real estate still an issue cre is tbd to be determined, play over a few years. not a lot of commercial real estate exposure. the other hand generating a deposit, deposdeposits

in the industry talking multiyear eps inflection point, because adding earnings to the industry down probably 20% end of this year playing for 25 and 26 when earnings go up one-third having revenues from negative to positive traditional banking revenues income going from negative to positive offeri ing levels negative to positive going in the right directions. a long way, the time is coming to own more bank stocks. >> got to run. a bank right now you don't want to own >> look, several banks with commercial real estate exposure. not saying going to be bad saying not good. a series of banks. co-marc kaw, mnt, regions, zions. if you want a cheap stock go with citigroup 30% discount to the book value. >> save that. >> there will not be a take 14 this is it.

>> no take 14. okay. there it is. on television. when we come back, former td ameritrade joe moglia joins us for a conversation on state of the market and what's happening with college sports and ncaa. reminder heading to the break. may 4th warren buffett in court answering questions. a shareholder with a question send it to berkshire questions at cnbc.com. read through them and selecting mti. o ask during theeeng stay tuned you've watching "squawk box" and this is cnbc.

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time to shine. get paycom and make the unnecessary unnecessary. everybody. this is cnbc seconds away from march durable goods orders ahead of that watching futures this morning dow basically back to flat down by about 7.5 points. s&p indicated up 14 points nasdaq continues to grow this morning. up by 130 points for futures there. treasury yields same level seen

in the last week or so ten-year still at 464 basically. twol year at 493 rick santelli is standing by at the cme in chicago and rick h hahas data with us. >> yes in a few seconds we'll see march preliminary durable goods. volatile series. of course, a couple weeks may change headline lately affected by transportation all right. numbers are hitting the wires. expecting the number close up to 2.5% and delivers. up 2. per6% headline durable go. best number back to november of last year when it was up 5.4 strip out transportation, it comes back down to earth we can see in this instance transportation was a positive. moves down to 0.2. expected up 0.2.

non-defense ex aircraft up 0.2 rearview mirror a revision, big revision from up 0.7 to only up 0.4. maybe pay closest attention to the shipment side. expected to be up 0.2. it is up 0.2 review mirror minus 0.6% unrevised. that's the worst level going back to feb ofof 2021. play close attention durable good orders beginning of the year a big negative. reversing some of that saw earlier in the year much was transportation orders. see interest rates, you pointed out, becky, haven't done much lately they did prior to lately was hugely significant in case anybody didn't notice, we kind of went through 4.5 closing yield basis like a hot knife through butter 467, 16th of this month, high yield close going back to november, and it is a doozy of a

resistance level i mentioned it about three weeks ago. watch that one closely closing yield basis. becky, back to you. >> 467 on the ten year is the doozy? >> yes correct. closing basis. >> right now at 464. got a big pce number coming out friday if you had to take a wager, higher, lower, which way would you go back towards 4% or 5% next >> i think what's going to happen is i think the preferred inflation numbers will come out roughly at expected. the yields will back away a bit. i think 467 on closing yield ways remains intact. i'm still of the belief the huge spending and huge deficit like $70 billion record auction today five-year notes will eventually push that yield above that level, and i don't have any significant resistance between 467 and the 5%.

>> thank you. steve liesman joins us with more now steve what are you looking through? >> last number we get before tomorrow's gdp number, it will affect them. used at part of inputs the revision, down, february reported influence i can't find it. keep looking for it. shipment number. capital goods number, aircraft shipments a number feeding into gdp. whether that would revise down from february. i don't know if rick is still there, but yesterday he reported the pmi numbers at 9:45. if you have a two-day chart of the ten year or two year, either one. never seen the market react to the pmi numbers at 9:45 the way they did yesterday huge declines with the notion this was a leading edge of the swelling economy just want to be careful of this number it did come in hot on the

headline number, but take up the transportation tremendous volatility from boeing orders. jo know the exact number like to three in january, four in february -- number goes up and down why we look at capital ex a aircraft investment. watching this a.i. stuff how much money pummelling into a.i. critical factors in term for productivity music is playing i'm continuing to talk it's time to be quiet, i think. >> really. >> coming up, joined by former dallas fed president robert kaplan on the new data. stay tuned you're watching "squawk box" on cnbc. welcome back to "squa

box. talking about the global goods data just got and gdp, inflation numbers due up later in the week bringing in former dallas fed president robert kaplan and get his thoughts on maybe the way the fed should see this, will

see this will you take us inside the brain of jay powell to the extent you think you can do some mind reading for us? >> i think this most recent durable goods number is consistent with a resilient economy and i think overarching narrative in my mind is, we have historically restricted monetary policy being blunted to a great extent by historically stimulative fiscal policy. unspent american rescue act money still being spent, inflation reduction act projects, infrastructure act projects and the conflict between those two has meant that the particularly the services sector, inflation in the service sector has been stickier goods are disinflating that's being helped by china over-capacity, and particularly global over-capacity, but

services, particularly labor, is where ground zero is of this inflation issue. if i'm at the fed i think what they're thinking is we're at full employment, and they can afford to be patient, and they do not want to make a mistake by beginning rate cuts and then having a resurgence of inflation, particularly in the service sector so they're going to wait, and i think they're going to push back expectations for a rate cut, and leave their options open for when they might act and the direction, even, they might act. it's because of this conflict between -- monetary and fiscal. >> to the extent there's a rate cut in the future maybe, you're suggesting potentially a rate hike in the future, is this now into a 2025 event? >> i still think there's a chance that the fed could cut rates in '24 they would like to cut rates it would be helpful to the

banks, helpful to small business and a perversive impact on rents by having high rates, because it's very hard to buy a home it's hard to build a multifamily rental project, might actually be putting upward pressure on rents. so i think they're going to keep their options open i think the bar is extremely high for actually raising rates down the road, but i think they're going to be patient, non-committal and kick the can down a few more months. >> so what do you think the chances are that they raise rates? >> i still think extremely low, and i would far rather see the fed and their loathed to do this call out the impact of fiscal spending and i'd love to see it a more whole of government approach to fighting inflation what do i mean by that slow down implementation of the

inflation reduction act. slow down implementation of the infrastructure act slow down implementation of unspent arca money because if you leave it solely to the fed to fight inflation, we'll have higher rates longer and it's having distorting effects and other damaging effects to the economy, i think, over the long run. >> what do you think, or do you have any concern about the employment picture as the year progresses i mean, this is the issue mr. furman raced earlier today >> long as you've got this sized fiscal stimulus, people have to remember we were in a $1.1 trillion deficit the first six months ran a fraction of a deficit last year historically high at full employment and these inflation reduction act projects infrastructure projects are stimulating demand for workers and seeing it all over the country.

i think the labor market will remain resilient. >> so just so we're clear, though flip this around equity markets now, still an expectation or some grant we do get a cut before end of the year if that doesn't happen, how do you think about the valuations you're seeing out there? >> i think there's still a chance for a cut this year, if that doesn't happen, got to remember the big platform companies like meta, amazon, nvidia, these are companies that don't tend to use that, their platform companies i think those companies can still perform very, very well, even if rates are sticky i think we're going to see higher rates shake out on smaller or midsized companies without the size and scale and access to technology and more sensitive to labor costs i think they'll be

disproportionately, negatively affected if rates stay higher longer and anything interest rate-sensitive negatively impacted. >> president kaplan, appreciate the time and perspective this morning. thank you. coming up former tv mogul joe moglia joins us and check out shares of moderna announcing a share with openai giving the pharma companies employees access to chatgpt enterprise u'> stay tuned yore watching "squawk box" on cnbc.

welcome back, everybody. jpmorgan chairman and ceo jamie dimon praising the economy at the club at new york. >> unbelievable. booming. business is booming for a while. since covid and kind of before then slow growth the economy was 30 low growth 20 years. if i was the government looking to say, "why?" a lot of, they have reasons for it regulations and bureaucracieses, stupidity and foreign policies anti-growth taxation and a bunch of other types of stuff, but if you look at the economy since then, it's been booming. >> joining us now to talk about the economy and the markets is joe moglia, former "today" america chairman and ceo and chairman at coastal carolina

university joe, talk about a brunch of stuff, but let's start when we've seen with the economy and how the markets have played off of that. jamie says how great the economy's doing, but also said later that most of the time the markets try to confound the most people as possible and could be setting up for one of those time i think he's more concerned what the future holds >> jamie second greatest ceo of our time in the financial world, you know, often when he comes on got to be concerned what going on in the world. concerned what's going on with the economy and prepared for that. >> risk management. >> yes >> were you there first? >> didn't want to say that i thought you would and then didn't want to correct you. >> i'm just -- trying to -- >> actually, the -- >> process the -- >> still trying to process, after you mentioned -- okay. i got it. >> i think, he's right where the economy is today one of the things i'm a little concerned with great for the individual consumer around 3.7. last year 4.4 traditionally 8%

significantly less than it's been having less money to spend obviously as time goes on. certainly concerns with the economy. biggest one i think, our economy's in good shape. a great labor market, inflation under control. history's on our side. one of the things keep keeps coming up on the show, 10% correction since the financial crisis, reality, 2008, 11 positive years. only 5% corrections. >> right. >> recently saw about a 5% one i think may or may not see that. if we do, once, not the end of the world. >> you think it's changed postfinancial crisis because of the fed's intervention and the government spending gone into all of these issues from the pandemic on? >> i think when we've had the significant crisis with regard to the pandemic, answer is, yes. financial crisis, and had bailouts answer is, yes with regard to that right now our economy's?

reasonably good shape. the concern what's going on geopolitically more tense than a month ago. i think, implore the aid packages approved, but that's just going to further irritate, i think, russia and china and iran that's just going to exacerbate the tensions that already exist. that's the biggest concern that i've got in the back of my head. >> oil prices still at like $83 a barrel, barely that's the one really surprising thing from all of this geopolitical potential fallout, particularly focused in the middle east? >> i agree unless we think there's not going to be anymore problems in the middle east, the risk oil prices going higher rather than not. going to have negative impact on the economy. >> we have bounced around today and every day just this idea that the markets have hung in so well i mean, we saw a 5% pullback of the s&p 500. erased this week what gives

earnings coming in strong. some of the inflation numbers stronger than expected the fed less likely to cut liesman pointing out only 16% of the fed cut come june. numbers coming down for july and even september at this point everything's clear >> yeah. i think everything really looks pretty good. pretty good with the exception of the geopolitical issues going on historically, in an election year, when we have an incumbent, there's a 12% gain that year, and that's, i think, 16 election years in a row the economy is in good shape, and i think the fed is doing a good job looking at the data, and they'll do a good job making decisions as they assess that data but we're okay there are significant issues, i think, around the world that can have major impact on us, but right now, the market doesn't seem to be overly concerned with that >> we talk to you about the markets and the fed a lot. we don't talk a lot about what's happening in collegiate sports with the ncaa, and that's something you know very well from your years as a coach in

the ncaa and your years and experience now at coastal carolina what do you think is happening with bringing in n.i.l. and the splintering of the different leagues? >> i think the biggest issue that i have got with regards to n.i.l., not the players getting paid there is no structure. there is no organization there's been a lack of leadership from the ncaa from the very beginning, and frankly, college athletic leadership has not stepped up to fill that gap. the only way, in my opinion, and there is a lot of talk about doing this now, that this is going to get fixed is the power five schools totally break away from the ncaa, period, have their own executive team that is totally autonomous, separate from the ncaa altogether if the nfl model themselves or ran themselves the way college athletics is today, they would go out of business you model yourself after the n.i.l. you have collective bargaining and salary caps, and eventually, you'll figure this out right now, it's the wild, wild, wild west.

with regard to our team, for example, there's not a player in our program -- there's not a kid we talk to on the portal or a kid we're recruiting that doesn't begin with, what kind of n.i.l. opportunities do we have? this is absolutely a business, and the athletes we have in % college today are far more -- especially in football -- far more professional athletes that be student athletes. nobody's thought about eligibility or graduation rates. nobody's talking about what you're going to major in it's just about how much money i'm going to receive this needs structure, and right now, it hasn't got any >> the problem with this is what i mean, as a fan, i know what the problem is it's a different team every single season. it's hard to follow sports like you used to, for your own alma mater, but what's the problem from your perspective on what's happening? >> lack of leadership. we need somebody to be able to step up, and everybody's going to -- is operating in a way that's under their own best interests. the television revenues are significant. so, the big ten, excluding the schools that are coming from the west coast, this year, could very well make $100 million

apiece just for football every year, and that may go up that's nothing to do with n.i.l. nobody wants to necessarily change that because of the amount of money that happens to be involved, but at the end of the day, this cannot go on forever. >> why not >> it's chaos. it's chaos there's no structure there's nothing -- nothing along that line. that's why i'm adamant -- i've been saying this for three years now -- power five football has to break away. if it does and gets a legitimate executive team that models themselves after the nfl, it will work. >> everybody else will follow suit >> well, they got to get that right first, and then they need to have right model, and then you can go on from there >> big bucks involved with that. it is amazingly interesting from a fan's perspective and from the business side of things too. joe, i want to thank you very much for coming in today >> thank you, becky, andrew. >> number one. >> numero uno. coming up, the biggest takeaways from boeing's results. we'll speak with a top analyst

in just a moment you're watching "squawk box," you're watching "squawk box," and this is cnbc amelia, weather. 70 degrees and sunny today. 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.

boeing was out with first quarter ruesults, reporting a smaller than expected loss, but commercial airplane revenue dropped by almost a third versus last year. joining us with his reaction is ron epstein, bank of america securities research analyst, he has a $109 price target on boeing with a neutral rating the stock's reacting well today, ron, and it's not far from your target these results were, i guess, to be expected. it's not a great time for boeing are they managing through it with some positive prospects for the future >> it's too soon to tell the real question on investors' minds is, who's going to be the new leadership team? you saw a lot of change at the company recently the ceo announced that he'll be stepping down. so, who's going to replace him and then they'll bring in their own team you've got a new leader at boeing commercial, a new chairman of the board.

there's been a lot of change i think the real salient points in the quarter, maybe why the stock's up a bit, is the free cash flow burn, albeit $3.9 $3.9 billion is a lot, it was less than what the street was looking for. their defense business was a little bit better. there were 2% margins, roughly and then, if you look at their services business, that was really kind of the shining star. and it's been, you know, services had good margins. but i think, you know, the real thing on investors' minds are, you know, one, who is this next management team going to be? and then two, expectations set by this current team regarding the turnaround, are those expectations realistic how long is it going to take it's really, where to from here? and we're in a bit of a holding pattern until we hear that and in a letter to employees, david calhoun, the current ceo,

said they'll be delivering a lot of 737s and 787s out of inventory this year. that should drive cash flow generation in the second half of the year, but to be honest with you, that's what we've heard from this management team again and again and again, so what's changed now? why is that going to happen in the second half of the year? with our $195 price target, we're very comfortable neutral here >> it's a show-me situation for sure do they need an engineer, do you think? would that help? so it doesn't get into the safety issues again? >> yeah, i think you need an engineer in the top level of the company, an engineer at ceo or cfo or someone in that team. as we've discussed before, there's been such a migration away from a focus on just sort of engineering excellence and so on and so forth and a real focus on the financials. i think having engineering prowess at the top -- >> although, they had one not that long ago, and that didn't

work either. we're out of time, i think, ron. you're close enough to $195 to be, you say, you're very comfortable at neutral right now. that makes sense we'll take one -- thank you. we'll see you again. there's the futures. we gotto go. we'll be back tomorrow, all of us make sure you join us. "squawk on the street" is next ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange s&p coming off back-to-back gains, first time in two months, dow trying to make it five straight gains for the first time this year hilton, texan, boeing, all in the earnings mix we're going to begin with tesla, surging in the premarket, despite this quarterly mix, including a biggest revenue slide in a decade. shares of th