it's april 1st, 2024 and "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. welcome back. we missed you. >> thank you. you didn't miss me that much? >> yes, absolutely. >> i missed you a little. you didn't bring me anything in terms of some exotic disease? >> exotic disease? >> is it okay to talk about it now? >> i went to africa. it was one of the great trips of all time. >> it wasn't your first rodeo?

>> no, but first with the kids. if you can do it, i highly recommend it. >> we haven't gotten all the details. >> remarkable thing to do. >> the vistas must be unbelievable, but it is about the animals. it is about everything? >> i would like to live in cape town and host "squawk box" from cape town and make that available. >> because it is on the ocean. >> it is the most beautiful city in the world. the ocean on the other side and mountain in the back drop. you can't get over it. the whole thing is crazy. >> now you are back here in times square. >> exactly. >> different lighting. >> different type of animals. >> i could fall forward at any time? >> why? >> i don't have my -- okay. >> you lost your balance? >> i don't p un't understand.

>> i don't have my box. >> here it comes. oh, here it comes. u.s. equity futures. >> it's me. >> it is about elephants and lions. >> and leopards. being outside allimals is amazi. >> we are happy you got to take the trip. >> luxury lodging. >> beautiful places. >> did you have one of those hats? the kind of cahats? safari hat. >> not super fancy. it was made by columbia. >> you have pictures? >> i have pictures. >> you didn't send me any. >> i did not. i'll share some. >> are you up to speed with the final four? >> not really. i'm more up to speed with the

fed. >> is this a segue? >> i'm trying. >> we'll try to move this over because let's look at the u.s. equity futures. federal reserve is a big topic of the day. we'll talk more about it in a minute. despite the idea that the federal reserve is less likely to cut when people were thinking, you are still looking at futures up this morning. dow is up triple digits with over 100. nasdaq is up almost is 100. s&p is up 16. it is the first trading day of the second quarter. she here's a look at the close of the first quarter. phenomenal numbers. dow up 5.6%. s&p was up by more than 10%. the nasdaq was up 9%. this morning, with treasury yields really center focus again with the issues, you will see that it looks like the ten-year yield is 4.20%. t two-year yield is 4.6.

dp gold prices are up $2,271 an ounce. bitcoin looks like it is below $70,000. in the meantime, let's update on the collapsed francis scott key bridge in maryland. on saturday, crews cut a section out of the waterway of the bridge to clear the passage way for transportation to resume for commercial and shipping and allow mores to assist. president biden will visit baltimore this week and pledged the federal government will pay for the costs of rebuilding that bridge. a lot on the planner this week. adp private payrolls on wednesday. weekly jobless claims and international trade data on thursday. we get the march employment report on friday and forecasters are expected to see the fourth straight month of at least

200,000 job gains. the unemployment rate expected to tick down a bit. the proxy battle with disney is happening on wednesday. over the weekend, reuters reported that nelson peltz won the backing of calpers. as of the end of december, calpers owned 6.6 million shares of disney. at&t says it is investigating an incident two weeks ago that led to millions of customers data to be published on the dark web. it reset passwords for customers and it is contacting them along with 65 million former customers whose data was compromised. the data was from 2019 or

earlier with dates of birth and social security numbers. in the meantime, mets owner, steve cohen revealed that his firm owns fox shares. this is suggesting this is a passive investment. this stake was built since the last public filing in february. news in the last couple of minutes. u.p.s. announcing an expansion of the partnership with the u.s. postal service. u.p.s. is the primary air cargo provide for the u.s. postal service and move the cargo in the united states. shifting the public/private partnerships. everyone competing with fedex and amazon. >> i guess it's cheap. that stock has been so dead for so long. what do you think?

cohen? >> it's cheap. i don't know if you played on that channel before with tubi. >> is that how it is pronounced? >> i don't know. >> tubi. like a tube. tubby like me? tubi. i didn't know what you were talking about for a second. >> it is a value play. fox still owns the big online real estate company in australia. questions about how you can ever get the value out of that. >> go back a long way. went down on the dominion deal when that happened. >> so much of value in the company is in online real estate in australia. we talk about fox as a media company. >> is it a media company? is that what they do?

fox news? >> fox news and sports. that's what it is. >> fox news is lonely lately. california's $20 minimum wage for fast food workers kicks in today. a half million people are expected to work in fast food in the state. many will see a raise of 25%. the law is for 60 locations nationwide. there are exemptions for bakeries and restaurants in airports. >> if you can call it a bakery. >> i don't remember. chipotle and mcdonald's has warned of price hikes for customers. pizza hut laid off more than 1,000 delivery drivers. must be a heck of a franchisee. instead switching to uber eats

and doordash which pass the costs on. >> where uber and lyft treat you as a contractor so they wouldn't make the same gains. >> it is interesting. we should be able to see what happens. pricing them out of the market. it is way above market rises. >> it is bad on a lot of fronts. we want people to have a liveable wage, but the unintended consequences. i saw this play out in schools and charitable foundations. whether they be aids or therapists, they would make more money if they quit their jobs taking on the most difficult tasks working with the most vulnerable people to go work fast food than where they are. that is not an aurgument to kee the wages low, but it is understanding value and realize we have to make sure that you

will not find workers for these very vulnerable issues. >> there are more starter positions that will not be a living wage. those might disappear. >> charlie munger said mcdonald's was the best for young people. >> i just got nervous. clint eastwood is trending. he's fine. coming up on the other side of the break, we have more going on. jay powell responding to the friday inflation data. he said there is no hurry to cut rates. we will get reaction from former vice chair roger ferguson. later, peter kraus will also join us as "squawk box" rolls on.

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welcome back to "squawk box." a key inflation gauge is the pce index. our next guest says the market should temper expectations of three rate cuts this year and possibly give small odds to the less likely, but not impossible of no cuts at all. i want to bring in roger ferguson, the former vice chair and cnbc contributor. who are the true odds of a no cut, roger? the market doesn't have that baked into their cake. >> the true odds are low.

10% to 15%, but not zero. the reason is that inflation has remained a little higher than one would hoped. i would describe as firmer. chair powell over the weekend having seen the incoming data was clear that the three-cut dot plot was conditional and playing out as expected. i think it is feeling like a wait and see. the fed is in no rush to cut. >> roger, i was struck by the idea there is dissension on the board. i don't know how typical that is with the quarterly projections show he teten policymakers showe rate point cuts, but nine committee members see two cuts or fewer. how often is that kind of dispersion the case? >> it is not totally surprising when you get to these points.

i think the desire would be for inflation to continue to come down and it has come down more slowly. one should expect people to have slightly different views. those are not diametrically opposed views. it may be off by one vote or one member. i would observe it and think it is what you expect. it depends or shows how muddled the data is right now and it is not giving the clearest signal because we had a couple of months where it is slightly firmer than one would have hoped. >> we are not that far from zero, roger. some people are saying one. i don't know what that does. one or two is not that different than zero. let me ask the question. you think we are restrictive right now because if we are not restrictive right now and if inflation continues to be a problem and we're actually not restrictive, why is -- it could

be a hike eventually, not just no cut, couldn't it? you figure we are restrictive so this will work where we are right now? >> i think we are restrictive, joe. everyone is scratching their heads with how firm the economy has been in the pace of what we thought was restrictive policy. there is a bit of a technical debate why i'm not calling it neutral or why it moved up. i.e., we are not as restrictive as we thought. it is fundamentally a big question right now. i think it is highly unlikely we will see an increase and put 10% or 15% odds on no further cuts and we stay where we are for a period of time. right now, it is data dependent and i have to say the prior expectations of what it takes to be restrictive might be questioned a little bit because the economy has been doing well

which is a good thing and employment is holding up. it may suggest that we are in restrictive territory and not as restrictive as many, including myself, had been thinking. >> if that's the case and the market doesn't appreciate this -- i mean, you expect there will be a come to jesus moment for the market? >> andrew, we have been talking about this on and off. there would have been several come to jesus moments for the market where they are participating and hoping for the cut that would validate how equity markets and fixed income markets have been moving. i think there is a possibility of another disappointing moment when the market wakes up and realizes the fed is not moving as quickly as they thought or not moving in the right direction from that standpoint. the possibility of more market turbulence is higher as the

market is -- >> roger, do you say to yourself these people don't understand or actually the economy is really strong and the earnings are going to be strong and this makes a lot of sense to you? >> unfortunately, it may be ironically. all of those things are true. the economy is strong. that is a good thing. earnings are reasonably well. that's a did thing. insofar as that leading to a fed cut is where there is a disconnect or leading to three fed cuts. there is a disconnect that is existing. that may mean volatility and we may not see the continued movement up like in the first qua quarter of the year. perhaps a flatter market going forward as the fed figures out what it will do and the market figures out with the fed what

will happen. >> roger ferguson, thank you for your per expespectespective thi coming up, a big boost for household wealth in the first quarter thanks to the gains in the stock market. robert frank has the numbers next. later, the wizards and capitals are not moving to virginia after all. d.c. mayor muriel boer wwsill join us in the 8:00 hour. "squawk box" will be right back. the award-winning trading platforms. bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. tailor the platforms to your unique needs with nearly endless customization. and track market trends with up-to-the-minute news and insights. trade brilliantly with schwab.

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i hope it is not increasing i ineq inequality? >> it's not. joe, record highs for stocks created record wealth. reaching an all-time high of $156 trillion thanks to the end of year stock rally. stocks added over $4 trillion of wealth for americans in the fourth quarter. most of the stocks going to the top. 10% of americans owning 87% of stocks. top 1% own half. since 2020, the stock market combined with rising real estate values created the fastest wealth boom for everyone. the middle 50% to 90%, middle the class, increased by 45% over the past three years. they have added $14 trillion in wealth. half of that coming from real estate values. those at the top have done better with the top 1% seeing

the wealth increase 49% since 2020. most of the gains coming from stocks with the equities adding $8 trillion in wealth. economists say the wealth effect from stocks with the gains increase consumer confidence is one reason the economy and spending continues to be so strong. >> all right. i'm not going to look at you in any way looking for something -- it's all good. i'll not try to find something. there are people that could. >> the other thing about this is we have a record number of americans invested in the stock market. 58% of americans now own stocks. 20% own individually direct held stocks. both are at an all-time record. we have record wealth have stocks, but record number of americans participating in the stock market. >> do you think that our debt problems and deficit issues are

so serious that maybe we can afford to not get quite as wealthy if we were to pay down some of this? in other words, should we go to 28% on the corporate tax rate? i don't know if that means the market doesn't go up as much or hurts profits or stock values go down, but let's say it is not as good or a tailwind. is that a good tradeoff? >> the mechanism i would say if we continue to have another strong year for stocks, we will have rising capital gains revenue which will be good for it. >> we were missing that the year before. >> 2022 last year. if you have more ipos and more people selling stocks. we are already seeing the large uptick in what will be larger capital gains revenue. that is the with big decider not just on the federal level, but in california and new york.

>> the counter to that is what happens when markets go down? you have a bigger portion of the population who feels hurt. >> and also, i do think roger ferguson was talking about the economy which has remained so strong and defied the ex expectations for why it should be weaker. i think this wealth effect is one reason. that's another reason, becky, if we see a downturn later this year with the stock markets, that could impact the consumer economy. >> am i less observant or are those new glasses? >> they are new glasses. >> very observant. >> i have seen those glasses. not on the air. >> on him? >> yes. another context. >> are you hanging out? >> it was a work function. >> same. i feel i have seen them before. >> were you there? >> no. >> a work function. >> we'll make sure you get an invitation next time. >> it was not in the mail.

>> was it fun? was there alcohol? >> a lot of fun. i don't know if there was alcohol. i think. >> i drink water. >> if robert was there, there was caviar. >> no caviar. it was a high-end situation. >> no wonder. okay. all right. i don't want to go to a place that wouldn't invite me. >> robert, thank you. >> thank you. when we come back, disney shareholders will vote this week on the proxy battle with the company and trian's nelson pelths. peltz. we will have the latest after the break.

good morning. welcome back to "squawk box." live from the nasdaq market site in times square. checking the futures. triple digit gains to start the second quarter. i'm not joking. it really is where they are this morning. no april fools joke. great first quarter. really strong end of 2023. >> i'm surprised. i thought based on the powell commentary and the pce on friday, i thought the first time

they trade, it would be lower with the disappointing news. >> good news is good and bad news is good. that can change. >> i can understand not being worried if powell changes things and says cuts may not be coming. the pce number is a surprise. if inflation gets out of hand and they have to raise rates? disney share homholders vot wednesday on the board and the proxy battle with nelson peltz. joining us now is matt bellomy. matt, here we are a couple of days before the meeting. there were a lot of votes that had not been cast. 22% on tuesday had been cast. big shareholders are waiting to see what happens. how do you think this shakes out? >> there have been developments. i think a lot of people, myself

included, would have thought this was a slam dunk for disney with the bob iger and george lucas being on his side. then we saw the iss advisory board and coming out in favor of trian. we saw calpers also have come out for the trian slaite. the wild card here is up to 40% of the disney shareholders are retail or individual. we don't know what they're going to do. >> what happens if it is a close vote? that's happened in the past with some of the battles and sometimes they said we will give you a board seat to try to recognize a significant number of the shareholders voted in favor of this. >> they can do anything they want up until the vote itself.

you know, there's been last-minute settlements a lot in these things. it is interesting that peltz seems to be polling in the precursors up to this and doing better than jay razullo who is the othernominee for the board. there could be a settlement where peltz is on the board, but not razullo. no indication that disney is interested in that. retail shareholders side with management in proxy battles. we will see what happens. a lot of people have strong feelings about disney. you saw disney settle the florida litigation last week. that was seen by many as a sign that iger was reaching out to people on the retail side that might be inclined to side with peltz for political reasons.

we settled that mess in florida. >> matt, speak to this. the new york times had a story about this 40% retail piece. you said they often times vote with management which is true, but they often times don't vote at all. the question is do you have any inside line on what percentage of that group disney thinks or the peltz team thinks that they will actually vote at all? >> you are right about that. from people i've talked to at disney, they believe it will be higher than normal given the amount of attention on this fight and the fact that they have done pa lot of outreach. disney has run advertising and emailed people and called individual shareholders. it is amazing given the problems at the company and they spent this much time and effort getting out the vote here. we don't know if it will

ultimately work, but they feel confident they have done enough outreach they will get higher than normal numbers on this. >> if that's the case, the amount of effort they put into it and this has gotten acrimonious with the focus on management. it is harder to think of some olive branch settlement in the next couple days leading up to this. what happens if there is a big turnout and nelson peltz doesn't win, but gets a significant portion of the vote? what does disney do at that point? they are doing the things that peltz has pushed them to do and things they whereere coming up on their own? what is the future for disney? >> it is funny. i talked to someone at disney speculating if peltz wins. they said the messaging will be great. welcome. we started doing a lot of the things you have been advocating

for which was the problem in the fight to begin with here. that would be a gigantic black eye for figer. they have to deal with the fact until disney performs on the line with the aggrevied shareholders, but these problems are not going away. disney is up 30% on the stock for the year and iger keeps citing. they are not where they were three years ago hovering around 200 on the market. until they get back there, i think these problems are not going away. >> that is a pretty tall order when you look at the industry. >> absolutely. the fact that everyone was riding the netflix bubble three

years ago. that certainly not coming back for companies that aren't netflix. not in the short-term. disney has done so much in the last six hundreds to try to appease these shareholders and turn the company around that iger would say they are already in a transformational moment for the company. it is unclear what nelson peltz being on the board right now is going to mean. obviously, he has tangled with ceos in the past appand pushed cost cutting on previous boards. presumably he would do the same here. i don't think disney thinks if he is on the board and there is a 180 turn. >> matt, thank you. a couple more days and we'll know. >> yup. coming up, the battle over

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welcome back to "squawk box." senator bernie sanders wants to meet with the ceo of companies to discuss the prices. he is calling the company to lower the price to no more than what they charge in canada. ozempic costs $300 a month in canada over $1,000 here in the united states. sanders responded to the published study that found a

month of owecan be made for a fn of the cost. fidelity's blue chip fund cuts the value in x by 5.7% in fed. the updated valuation is a 3% drop since musk bought into it in 2022. fidelity helped musk complete the $44 billion purchase. it values x by $5.3 million. coming up, the field is set now for the men's ncaa hoops final four. sports business professor patrick riche will join us next. "squawk box" will be right back.

it says we're down to the final four.

i guess that's why they named it this, if fact. for a look at the latest with the ncaa and march madness, let's bring in patrick rishe. he is the founder and ceo of sports impacts. thanks for joining us. i wanted to make sure, but i haven't watched closely. it could end up uconn and purdue. they're not playing each other in this next round. that would be -- i'm not saying that is it. i'm not disparaging anyone else who is left, but that would be the battle for the ages, i think. >> it certainly would. i think we all miss the parlay on the nc state men and women getting into the final four which they both have. that would have been a tremendous parlay. the first time that the north carolina state men have made the

final four since 1983. the jimmy volvano run. tonight is the big night, joe. there could be records and there will be records set tonight in terms of ratings. you have a dynamic double header with the women's regional finals. caitlin clark against angel reece. the rematch from national championship from last year. you have juju watkins as well. >> amazing. the other thing that i was flabbergasted by was 11.5 points for alabama? >> yeah. again, sizeable. alabama and nc state certainly on the men's side were not expected to be here. >> i had alabama. my bracket -- i would be winning

if tv news -- 2.8 million and i was at 33,000 until yesterday. now i'm 37,000. that's like 1%? >> you are doing extremely well. that's great. better than mine, joe. >> i feel like i get a participation. only time you can say i'm in 33,000th place and kicking butt. >> i tell you what, this is an amazing tournament. how about the faux pas with the line? you could see it. i don't know what they were thinking. you can look at the court and see the three-point line was different for that game. the coaches conferenced and decided they did not want to delay and redo everything. they went ahead and played the game. one of the things this morning is the women's regionals and one

in portland and one in albany. two regionals at the same site. we understand why they do that. they want the right size and facility full. they need to think about centralizing the regionals to draw more people. ratings are great ontv, but i think they need to think more about places like indianapolis, nashville, omaha, oklahoma city, they do that for the college world series. i think they need to think abouting it that for some of these women's regionals. >> it is kind of a watershed year, what you just described. i knew sc -- i'm going to have to tell my -- we may be watching tonight. i don't think we actually appreciated that, but the combination of i guess how many billions are going to be bet on both men and women and then people like caitlin clark and what you just talked about, i mean, it's almost a watershed year for what's happening

with -- on both the men and women's side. >> it is. again, i think uconn, especially in this era, the fact that the uconn men have a chance to repeat as national champions. in this world where the top men's players, it's a revolving door, few of them are staying beyond one year, maybe two years, for them to go ahead and be back there and have a shot to repeat is a tremendous story. and on the women's side, as we've talked about, it's been a watershed moment. what i want to see is how this is going to impact the wnba going forward. we're not going to fool ourselves and expect this is going to be -- the wnba is going to rival the nba. as these women, if they're playing three and four years in college, that helps them build their brand, which only helps the wnba when they get there. now they have a better chance of having more traction. >> you can't really say it's not a business story when we're talking about this crazy

streaming service with, you know, everybody trying to pool their resources because streaming is so hard to make money on. trying to figure out, and march madness might be the most valuable asset in all of sports maybe. >> well, it's up there, joe. the ncaa, they report their revenues as somewhere around the 1.3, 1.4 billion range, and ncaa march madness is about 90% of that. so it's certainly in college sports realm, even though college football reigns supreme in terms of the college football playoffs, that's a separate entity outside the ncaa. most of their revenue is generated from championships and 90% of that is from march madness. >> if suddenly women's final four and then the wnba, that's probably going to double in value in not too long a time, for people that need to try o'acto

acquire the rights for that. >> i think you've seen more private equity investors in all of sports and in particular in women's sports, so i have no doubt that, again, as these names, as the college basketball world gets bigger for the women, it's only going to help the wnba and i think more private equity investors will come into the wnba. >> all right. so there's been -- would you say this year in men's there's been more dark horses or -- i don't know if -- every year is like this. i mean last year we had a crazy final four, remember? we had what, san diego state. >> florida atlantic. >> florida atlantic. but north carolina state, that's a total shock. alabama i don't think is a -- if i had them it's not a shocker. >> i mean, this year has been more chocked with the exception of north carolina state. they're still coming from a premier conference. what's crazy is i was looking this stat up this morning, there has not been and won't be this year a men's champion west of

texas since 1997. >> yeah, and when did florida repeat? that was back in the late '90s, wasn't it? >> yeah, that was around the '90s. it's been a long time. uconn is on the precipice. they're a favorite, they're destroying everyone. i don't know if they would destroy purdue. >> that guy when he stands underneath the basket, everybody's like -- i just don't know how you get over him really. he's got to like turn his back for a second for you to get in there, you know? >> this has been a redemption year for them obviously the last couple of years. they've been knocked out by some of these lower seeds. someone's been able to stop them in the past. >> you think -- okay. connecticut, purdue. you telling me they're going to be double-digit -- there's no way they're double-digit favorites over purdue, no way. >> i don't think they'll be double-digit favorites over purdue. i'm going to put my amateur

bookmaking on the line. i'm saying they would probably be six-point favorites over purdue. >> they've got a great three point shooter in cam spencer. he could shoot right over edy's head. >> if he misses it edy gets a rebound. >> somewhere jim calhoun is smiling. the old uconn coach. great to see what mr. hurley is doing reviving this franchise. >> he is a great coach. >> all right, patrick risch, thank you. >> thank you. >> tonight, big night. not going to get any sleep again. coming up in the next hour, yale's jeff sonnenfeld will weigh in on the latest disney's shareholder vote, and we will talk about themp iact of the california minimum wage hike for fast food workers. "squawk box" will be right back. s

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good morning, everybody. welcome to the second quarter, the futures are higher and the dow now closing in on 40,000. got the s&p coming off its best first quarter in five years. it's a big month ahead for bitcoin too. prices enter the second quarter 60% higher than where they started the year. in just a few weeks, we are expecting the having. we're going to talk about that with crypto bull anthony pompliano. a big week ahead for disney, we'll talk about whether nelson peltz or disney's current board will prevail. the second hour of "squawk box" begins right now.

♪ good morning, and welcome back to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square. i'm andrew ross sorkin along with becky quick and joe kernen. green on the screen there. the dow looks like it will open 112 points higher, the s&p looking to open 17 points higher. treasuries just had a big debate about what the fed may or may not do. roger ferguson telling us he thinks it's possible we get no cuts this year. the two-year note sitting at 4.603. and then let's talk a little oil. oil boards, you're looking at wti crude. it will cost you $82 and one penny per barrel, and then finally crypto, our prompter of risk on, risk off maybe or

something else. i don't even know anymore. close to 70,000. we're sitting under at $69,567. >> and the fed's preferred measure of inflation, basically as expected in february. on friday we learned year-over-year pce measured 2.5%, 2.8% excluding food and energy. joining us now on inflation on the market strong performance in the first quarter and much more, gabriella santos, chief market strategist for the americas at jpmorgan asset management. good morning. >> good morning. >> roger ferguson on, and i think he -- i think the general perspective right now is that inflation is still a little sticky, but no one expects it to really turn around and head higher or to stay like this for a long time. the idea that we could actually need to start another rate hiking cycle is not on anyone's

mind, so if we are at this point where, you know, we get a few bad data points, we're trending in the right direction with these great earnings and with this great economy, why not stay long, but i would the minute that it became clear -- if they aren't restrictive here and actually would need to raise, i think that could probably throw a wrench in the works. >> i agree 100%, if we go back to the higher for longer kind of discussion, that would be an issue for now. we're in a high for longer discussion, which means rates can stay at these elevated levels but the next move is a rate cut. i think what was really damaging last year was the idea that we're not entirely sure how far the fed is willing to take rates higher and hence damage the economy in its inflation fight, and i think really the december fomc meeting, which was emphasized again at the march meeting and in powell's speech last week is that really they're

not willing to sacrifice the economy to get inflation to 2% in a shorter time line. they're wokay with bumps in the road. they're okay with inflation getting to 2% over a time horizon. we don't have to fear. we can actually cheer resilient strong economic data. that's what i think is behind these all-time highs in the market and the broadening out in the performance where we'll started to see cyclicals participate. >> you think high for longer? >> i think that's much more manageable, and you can see that in corporate behavior as well, for companies what was really damaging was not really knowing how high the cost of capital could go. once you have a better feeling of around where it can be, you start to see more bond issuance, m m&a, ipos and hence it really opens character markets and that's a good thing. because we went from six cuts and then we went maybe four and maybe now there's three, and

there are people talking about one cut that we heard or now none and the market hasn't moved at all. somehow i was able to digest that and go up 100 points every day. >> i think that's a good thing to see that the stock market is not held hostage -- >> by the fed. >> by the daily moves in fed pricing expectations or even the two-year or the ten-year. that's a good thing. it means investors are going back to focusing on fundamentals, on earnings, and it also signals a focus, again, on resilient nominal growth and hence a broadening out in earnings growth as the year progresses. from just that mag 7 earnings growth which was the story last year to much more of a broadening out in the recovery of earnings and hence more participation from different sectors. >> there are things on the horizon near-term and long-term, geopolitical things. i don't know where you want to start. it's so many things. ukraine, taiwan, the mideast.

we've got this huge amount of debt overhanging. is there a productivity solution to some of our debt issues here that -- or is that just so far off that, you know, we'll get whatever that expression is, was it thomas aquinas or thomas moore get chased, just not today. we're fine now with 33 trillion in debt key bond stock. >> i think what we learned in the middle of last year is there a focus on the elevated level of the deficit and hence on treasury issuance. when we had that freakout in the middle of last year as a result of elevated treasury issuance, and i think that's one of the reasons for us that we don't expect long end yields, so think ten-year plus, to really deviate from this range that they've been in since the end of last year, let's call it 375 to 425, until there's reneventually a

recession. there's incorporating a certain premium for all those treasury issuances. the risk later in the year we think, as we get closer to election season and we actually start hearing more from former president trump and president biden, as well as the general proposition for what to do with the individual tax cuts worth $2.6 trillion, which are set to expire at the end of next year, and then that could lead to even more of a focus on even higher deficits and more treasury issuance. >> i just go back to this issue of if inflation starts to get higher, are we really facing a fed that's not going to do something about that? and then not just this fed, what happens if there's a change in the administration and there's a new fed chief who comes in 2026 or maybe sooner, it seems to me that all of these politicians are listening for the litmus test being are you going to be easy on rates for the next fed chief, whatever they look for. i think powell's a different case. he kind of does what he wants,

if you've got somebody else in there, is anyone going to be able to say no, i'm going to do what needs to be done with the case for inflation. >> i think for us we do think the fed independent in its mandate and is really focusing -- >> i think jay powell is too. >> if you start politicizing central banks that doesn't tend to end well. we've seen that time and time again tin emerging markets. i think in terms of inflation, which is where we are, as chair powell said bumps in the road in journey, that's okay. i think the danger does become, becky, if inflation expectations start to become unanchored again, either because inflation starts to come in higher or gasoline prices continue moving higher. >> wages continue to climb like they're doing. >> without the -- or real wages continue to move higher but without the accompanying improvement on the productivity side. i think really the thing to watch is inflation expectations, and the good news is when we

look at the michigan consumer sentiment survey is so far actually inflation expectations are moving lower. and i think that does give the fed comfort to wait out the disinflationary process. >> you think skra jay powell isg to be in this job? how long is he going to be in this job? seriously. >> i think it will depend oen te new administration. >> if the current administration is in the future, he would get another jump? >> i'm not sure. i think it will -- it certainly is not an easy job. >> don't you think it's politicized already? w have you said that you could say jay powell was political insofar as he's now been on two political sides of it. >> we would prefer less fed speak personally. i think it is a lot of daily commentary to digest, and we

already have quite elevated volatility across the yield curve. it is what it is, and we do tend to look through some of the day-to-day noise and focus on chair powell, which has been very focused on building consensus in the committee. but let's see what happens with the new administration. i don't think we're at the point where you see in emerging markets the president tells the central bank what to do? >> who do you like as the next to fed secretary. would john paul son? >> there's also another name in the mix. jamie dimon. >> do you think that's real? >> i have no idea. >> if we stop talking about the fed -- if they really do -- the show's going to be cut to ab han hour, "squawk box," unless you're ready to do more sports and gambling. >> i'm ready. >> i think we're all ready. >> every time i think we're out of the fed controlling things, i

change my mind because -- >> i would like to move on. do ai and tech. other stuff. >> i think we could do so much, especially focusing on earnings trends, industrial policy. >> there you go. >> i'm with her. >> ai, shifting supply chains. there's a lot of good stuff. >> she won't be on as much. >> i'm happy to be on more. >> okay, this is even better. >> you just think it's a one-hour show at 8:00, that's what you like. >> i'm also up for that. let me know. >> monday through thursday. >> through wednesday. monday through wednesday. >> dwabgabriella, thank you. when we come backseat, crypto in the second quarter and beyond, we're going to talk digital assets prices. and later this hour, the proxy fight at disney coming down to the wire. what should investors expect this week when the ballots are counted? all that and more still t onhe way this morning. stay tuned, you're watching "squawk box" and this is cnbc.

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♪ welcome back to "squawk box." take a look at bitcoin prices this morning. we're just hovering under $70,000 right about now. this month expected to bring the next bitcoin having in which the reward for mining cryptocurrency drops by half. joining us right now on all things crypto, anthony pom pompliano. on one end it's like a risk on situation. on the other it's arguably supposed to be a hedge. it's very hard for me to get around the idea that it's both. then there's the having that's coming. that's sort of an idiosyncratic one piece of the puzzle, not something that's an ongoing

piece. then you have the etf which is also an idiosyncratic moment in time. put that puzzle together for us. >> bitcoin is the most kmieting asset in financial markets because of what you described. it's this highly complex thing everybody's trying to figure out. for some people it is a risk on asset. >> can it be both? >> it can be different things to different people. right now i think one of the most interesting parts about this, if you talk with someone on wall street, why are they buying it? they're buying it because they want the price exposure via the etfs. if you go and you talk to someone maybe in a country where they actually are worried about somebody seizing their assets, they're buying bitcoin because they want to make sure they can hold onto the economic value. you have an asset, this is not unique to bitcoin in that some assets serve different purposes for different people. because of the global nature, because of the decentralization and because it was adopted by individuals before the institutions, we're seeing it kind of exaggerated as we watch

the asset become adopted. we just hit a really important milestone before the having. we just had the highest weekly, monthly and quarterly close for bitcoin. so the last four times that's that's happened, bitcoin has appreciated at least 300% through the rest of the bull market. doesn't mean it's going to happen again, but to have that happen before the having, it's kind of like the demand shock happened, now we're going to have the supply shock. and so it's hard just to see how the prices continue to go up. >> i want to ask you this question. it goes to the risk on versus the inflation hedge. i just got back from south africa and i literally asked anybody who was around when i was in zimbabwe, zambia. the rand has done terribly of course. inflated away. horrific situation, and i would ask anybody who was around very wealthy people, folks who are middle class, folks who were at the bottom, and i said do you own any bitcoin? almost to a t they said no, that

it actually was not a thing. and this was -- by wait, i mean, it wasn't a scientific study, but a lot of people i asked about bitcoin because i thought that the conversation we have around this table is that somehow the unbanked and everybody who's in these countries that is struggling with inflation is buying bitcoin. at least from what i saw, they're not -- and then i went to look at the flows, and it also is true that they're not. the math does not suggest that the hedge argument on inflation is actually a real one, and i just wonder whether it's sort of used to sort of sprinkle fairy dust to other people who then are speculating. i think there's a lot of people out there who are speculating and want it to go higher and it's a risk on asset. that's my take on it at the moment. >> i think it depends on what country you look at. i'll give you two examples f. you go to nigeria, it's definitely true that people are buying bitcoin. i don't know why it's happening in nigeria and not in south

fr africa. in argentina some people are buying bitcoin but there are a lot of people who want dollar backed stablecoins. i think country by country you're going to see different adoption of these technologies. what i will say is you don't have to go to emerging markets to find a reason people want to buy this, right? if you look at the united states dollar it's lost 25% of its purchasing power since 2020. bitcoin is up 800% during that same time period. paul tudor jones, these people came sout and said look, i think it's an inflation hedge. hedges are always this weird thing where people expect you buy it and inflation explodes the next day. instead what we've seen is that bitcoin is a free market asset that trades forward looking, and so bitcoin's rise, we have seven straight months of bitcoin in the green up until this past month skand so why is it going ? >> and inflation is coming down. >> inflation is coming down year-over-year, but inflation is actually going up month over month. >> it's anticipating the next easing cycle. >> so you could argue, one, it

is anticipating the next easing cycle. you could also argue the alarm bell is going off. people e see that and they're buying bitcoin and bitcoin going up is telling us, wait a second, inflation is a bigger problem than we actually thought. >> a hiking cycle that went from 65,000 down to 17,000. >> correct. >> you don't think the majority of people that are buying the etf today or buying underlying bitcoin are doing it because they think the train is leaving the station and they want to be on the train. that's what this is about. >> why would they have thought the train's leaving the station at 25,000. >> i think unfortunately what happens is you know people like to get on the train once the train has practically left the station. >> it went to 17,000, why would people -- when it's dropped from 65, when you were looking at it from -- >> right. >> and like why would anyone buy this after -- >> i think there's a lot of people who were very nervous about it after ftx. >> what do you mean they're getting on the train, when the train is turned around and gone into the toilet. >> what i'm saying, now they see

the etf, they see it moving back. >> 25 to 40 i think speculation on the etf was going to get approved. i think again going back to the conversation, this is a highly complex retirement where bitcoin is serving different purposes to different people, and one that makes it attractive to a lot of folks. >> i guess what i'm saying, it may serve different purposes, different people. if you told me that 90% of the people were -- in my mind, this is my own thesis. i think 80 to 90% of the folks who are buying this thing are buying it because it's a risk on, the train is leaving, i think the train's leaving, and i want to get in on the action. there's another 10 or maybe 20%, maybe, who of this sort of inflation hedge idea around their own poeexposure to their currency. >> i don't think it's a 50/50 thing. do you see what i'm saying? >> we've become a society of gamblers. if you think about we have zero

day options. we have sports betting, memes coin trading. 1980s boiler room, penny stocks. this is all happening. again, why is that occurring? the dollar has lost 25% of its purchasing power in four years. we have $1.1 trillion in credit card debt. we have 43 million americans that have federal student debt. the average balance is $30,000. people have lost hope, they do not have hope. how are you supposed to live in a country where it is cheaper to rent or buy a home in 50 major metros. you don't have hope. what do you do? >> you think this is a lottery ticket. this is a gamble. >> if you go and buy a lottery ticket, it's 300 million to 1 odds. a meme coin has better odds than a lottery ticket. >> pick your assets for the greater full theory. is it nvidia? train's leaving the station. they got to get on it. take your meme stock, pick your -- you know, your commodity.

pick whatever you want. there's no doubt that when there's liquidity everywhere that it's going to chase assets and things -- but i don't think that because that's one of the reasons it goes higher doesn't undercut the fundamental case for that asset. on a case by case basis -- >> that is the fundamental question, and only, you know, 5, 10, 0 years from now we'll know the answer. >> i think there are people that do understand it that don't have that question about the fundamental underlying -- >> there are people who have certainty, and whether they should or not is the question. >> another key piece is bitcoin is a decentralized organization that has no marketing team, right? so price is the marketing of bitcoin. when the price goes up, speculators come in, but what ends up happening is when we get those drawdowns some of them stick around and become kind of bitcoin believers. some of them do leave. >> netflix is a great asset, it's worth either $800 or $70. you get the train coming back to

the station, it's 180. it's an asset that people watch. subscribers come in, they have now hit shows. they do all that. there's no questioning the underlying asset value, but on any given day, greater fool theories or momentum or euphoria. >> you own a company, you own a percentage of that company, you own a percentage of the revenue, of the earnings that roll through. that's the argument. i if it's a company that pays dividends you get a portion of this. >> you got to go way down the line -- with a stock that doesn't pay a dividend you can't stha. >> say that. >> with a stock that has earnings. that's the difference between -- >> that doesn't flow through. >> you still say this is a productive asset -- >> but you're hoping the dividends go up over time. >> it's not even dividends, if you don't pay a dividend, you have a percentage of the earnings of that company and you figure that that will make your stock more valuable over time because of the earnings that the company's kicking off. >> that's the concept.

>> that's at least a concede. >> it is. but to go and see something trading at 200 times revenue -- >> mr. pompliano thank you for joining us. >> they're going to continue this debate dungri commercial. >> 200 times revenue, it has to do -- >> it has no profits sweet, turn simulation off. tssk, tssk, not so fast. what, why? did you forget marcus? forget what? your chem exam? . flashcard time! the atomic weight of boron. the future isn't scary, not investing in it is. 100 innovative companies, one etf. before investing, carefully read and consider fund investment objectives, risks, charges expenses and more in prospectus at invesco.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 with godaddy airo

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coming up next, top stocks to watch on this first day of april. also, a programming note as we head to a break. cnbc is back at the stone conference this wednesday. we're going to have live coverage all day on air and online from the investor summit including scotwaert pn's exclusive interview. don't miss it, "squawk box" will be right back after this. encore energy, america's clean energy company, now in production in south texas. energizing america with reliable and affordable uranium

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let's get to dom chu with a look at this morning's premarket movers. >> joe, becky, andrew, we'll start off our monday morning mover's edition with a check on tesla. it's up fractionally, maybe 1/2, 1/3 of a percent here. it's due in part to raise prices on its top selling model y suv in the u.s. prices on tesla's website show a thousand dollars price hike on models across the spectrum for model y. tesla did announce last month it would raise those prices for the model y by april 1st. this move was anticipated, but a little bit of positivity up about 1/4 of 1% for tesla. sticking with

transportation, check out shares of u.p.s., which are north of 1.5% higher right now, just about 1.8%, and then on 13,000 shares of volume, the package delivery and transportation logistics giant announced it has inked a deal to become the primary air cargo partner for the u.s. postal service. u.p.s. will replace long-time partner fedex, which was the postal service key partner for the past 22 years. fedex shares in response due to that news lower. part of that is due to the 2% drop here. you can see fedex shares down 2%, u.p.s. up nearly 2%, and we'll end with a couple of analyst calls getting some attention this morning. many of those analysts are unveiling their top picks for the second quarter as we start day one of that period today. no surprise that many think mega cap tech will continue to be a part of an upside story. bank of america is naming google parent company alphabet as one of its top picks. those shares up about 1/3 of 1%. after underperforming its

magnificent 7 peers upside potential could power more positive sentiment. you've got wells fargo adding amazon as a tactical outweight for the -- overweight for the quarter. those shares up about 1/2 of 1%. use of its fulfillment services which could help power better profit margins. for more on some of the top analyst calls of the cay, head to cnbc.com/pro. subscribers can get more in depth analysis on key research reports every morning, becky. >> dom, thank you, and thank you for being here to get us caught up to speed. when we come back, crunch time for disney, a hard fought proxy vote campaign comes to a head this week. we will talk about where things stand with yale's jeff sonnenfeld. "squawk box" will be right back.

welcome back to "squawk box." it a big week for disney. a very big one. the company hosting its annual shareholder meeting. the deadline for votes in what could be the most expensive proxy battle in history. activist investor nelson peltz looking to try to boot two disney directors off the board. both sides have picked up big

name support late last week. california's calpers pension fund said it voted in favor of peltz. joining us on all of this is jeff sonnenfeld, the yale school of management senior associate dean for leadership studies and a cnbc contributor. somebody who has been a very vocal backer in recent weeks if not over the past month and a half of bob iger and the current team. jeff, are you surprised at some of the names we've heard come out in favor of trian and of nelson peltz given your voci vociferous report or words and not just words but data which you have tried to suggest and show that the current board under bob iger is doing a much better job than perhaps nelson peltz is willing to acknowledge? >> fantastic opening question. i am disappointed, you know, it's -- fred allen once said

that invitation is the highest form of television. he should have said the highest form of governance, governistas. iss has consistently gotten them wrong from their backing of enron, world com, it's -- no, it's disappointing and what they did is they absolutely conflated -- if you look at their report, which they're not happy about, is that bob iger and bob chapek are confused in their data. they combined the two, which is crazy. so of course the performance looked down for the two years of the three they looked at. >> jeff, let me ask you specifically about that. when you look at some of the tables and data that you've put together, what you do, and i'm sure there's a debate over this, is you exclude the period of time -- and maybe this should be obvious -- between the time that bob iger stepped down and handed the reins to bob chapek and the time that bob iger came back.

and during those periods, if you remove the chapek period, of course, things look materially better. p t there and a question mark and this is the argument that nelson p peltz and other investors would make, which is to say a lots of the things that happened during the chapek period were decisions that were started in the bob iger era, and therefore, he should be, quote, unquote, credited or demerited or however you want to think about it with some of that. >> these are decisions that -- bob chapek, it's not a dispute. somebody can create a haze. bob chapek is the one who green lit those loser films. bob iger had eight of the top ten, 15 of the -- 13 of the top 20 all-time box office successes. all those were greater than a billion dollars. every film under chapek didn't come close to a billion dollars.

they were disasters. under bob iger just this calendar year, forget history, look at this calendar year, this is the number one dow tok. disney is the number one. it's up 33, 34% as of this morning. 583% total shareholder return last time that he was in charge, and now we're up 34%. there's nobody like that. towers over every media, fox, empire. >> i'm not disputing your perspective or your thought, but my question is this -- and this is the piece that i'm trying to understand -- there were also a number of films that have come out during bob iger's new reign, if you will, that aren'haven't as well received as the market or disney would have liked. some of those films were created -- hold on. were created during the bob chapek period, right? and now -- and so then the question is does he get credited or demerited for that.

my only point is -- there was only a short period of time, you can say bob chapek did a disastrous job during that period, nonetheless, during that period, some of what chapek was living with was clearly things ha bob iger had done and some of the things that bob iger is living with today are things chapek had done. is that not fair? >> there's always going to be a little bit of carryover, the film this past summer, these were all green lit by chapek that were huge disappointments. if you take a look at the arc of bob iger's career, those eight out of top ten all-time, you know, box offices and 13 out of top 20 can't be erased. you can't erase history, even we learned with michael j. fox and back to the future w, we can't reinvent the past. he, in fact, performed incredibly well in the film business. but who are we looking at the other side of the aisle, where are people coming up with these

rosy, you know, celebrations of one of the greatest failing financiers today. iger is a genuine wizard in value creation. peltz is a value destroyer. >> here's the piece that i don't understand. if you are right and i'm not disputing, you may very well be right about all of this, the question therefore is how is it possible that an iss -- i know you've called them mistaken -- how is it an iss, how is it a calpers, some of the articles we have read and other things have taken a very nelson peltz supportive position. >> well, there is such a -- >> what do you think is going on there? if it's as obvious as you say it is, to me it's almost obvious. i sort of think it's inexplicable what's happening here. how do you rationalize it? >> sometimes propaganda confuses people. you get somebody with a great deal of bluster.

nelson peltz failed 15 out of 22 of his investments where he's been on the board have dramatically underperformed the s&p, he has no success as a fina financier. his experience is in industrial and consumer goods where he's been failing. the only thing entertaining is when he does these filibusters on tv shows and that confuses investors and government arena. these are the same people that endorsed enron, world com, carly f fiori na. we're not talking about that much. if we're talking about calpers, we're talking about 0.3% of the stock. it's not worth the time -- >> hey, jeff a great supporter of bob iger said recently to me, you know, the good news is he may succeed in this and that the board will be his, if you will, but from a shareholder perspective, it is unlikely that even if nelson peltz loses that

he really goes away and that actually, that pressure unto itself might actually be a good thing. i don't know if it's a good thing or a bad thing, which is to say that disney is now on notice and all of a sudden there will be another year-long stretch where we will see what the performance of disney is and people will decide in a year if it appears that bob iger is having great success, nelson peltz will go away, but if he's not having great success and someone said just like donald trump, he'll be back. >> you know, it's such a good question that our friend becky tried it twice an hour ago of puck, and i think he caught it the second round and wond ering what happens if we come close on a vote. do they somehow make concessions to him. ky tell you factually that board members rue the day they made such a deal with peltz on the procter & gamble board. he came up with no ideas other than to move m&a into local

divisions which was crazy and to re-locate the headquarters from sans for no particular reason and as you know, in pepsi co, they succeeded by ignoring him. they didn't combine frito lay with his losing hand in mondelez. they ignored his suggestion. it's good that you guys raise it. you and becky are right, this is 25 times that this october je narn with nothing else to do, i guess he doesn't want to play the senior round of golf. this is other people's money by the way. he has even combined with ike pearl mutter who is most of the lion's share of what he has here, about 1.5% we're looking at here. most of that is purr mutters. peltz sold a third of his shares already. you know, what's he doing here? the succession plan is very

strong. their fox deal was actually created about $74 billion of value. he just created a lot of noise out of nonsense, and people got confused and they've got the best plan to convert from linear to streaming of anybody in the traditional business. >> jeff w, we always appreciate your perspective. i love a good shuffleboard to be honest with you, there's a lot to do. >> hey, welcome back from the forest, it's great to see you back from the jungles. we appreciate it. you could have told me happy birthday by the way. thank you. >> is today a big day? happy birthday. i'll sing, jeff, i'd sing for you ♪ happy birthday to you ♪ >> anyway, i think joe desperately wants to get to commercial. >> no, i just can't believe sonnenfeld's birthday is april fool's. a $20 an hour minimum wage goes into effect for fast food workers in california.

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minimum wages for fast food workers are set to hit $20 an hour in california today after a deal was struck last fall between the unions and the fast food industry. kate rogers joins us right now with more on what this means for workers, businesses, and consumers in that state. good morning, kate. >> hi, becky, good morning. the minimum will be among the highest in the nation and the sector's highest as of today. right now glass door data show that just over 20% of california fast food workers are making $20 an hour, so many more will wind up getting a pay raise. there are half a million workers in the sector in california. i sat down exclusively with mary kay henry, seiu president who said this model of organizing by sector instead of by business, by business will be replicated in the future, mentioning new york, washington, and illinois as potential future targets.

>> it's a combination of workers' willingness to strike and to lobby legislators and to defend the governor in the recall campaign as the fast food workers did here in california. when those conditions are created in other states, we'll be created in other states will be able to make this same progress. >> the hype may also lift wages for low-wage workers outside of the restaurant sector. business owners like general b. perez running growing roots a plant design and maintenance economy in long beach closely monitoring to remain competitive. >> it's a ripple effect, because i'm not part of that sindustry but of course looking at that as all. haven't worried about it too much. always over minimum wage. keeps increasing, increasing, a 25% increase from $16 to $20. >> lowest paid worker at $19 and has to be wary of further price

increases to the customer. back to you. >> kate, the issue here really are -- calling them unintended consequences. perhaps in the case of the unions intended consequences, but really creates all kinds of unknown potential changes, and how that ripples through not just related industries but completely unrelated industries. how do you find workers in any of those other industries? earlier this morning talking whether that be home health care aids, therapists, aides in schools. a lot of people caring for elderly. some of our most vulnerable populations and these wages are n not -- now going to far outstrip those wages? >> did a big story several years ago. raised to $15 an hour, high at the time. different studies, different findings.

low-wage workers, some, wage cut but a nice economic boost. depending how you survey people different findings. a very interesting study to see here in california. you heard the seic president are looking to do this in other states. kind of a back-door way of unionizing. by sector, right? not by individual business. fascinating process. >> an overnight rake hike 25% versus stair step as traditionally done when you start to raise minimum wages to allow things to settle in instead of having thinking o overnight crazy change. kate, thank you. interesting look what this will all mean. in fact, right now joining us with an on-the-ground take on the new fast food minimum wage in california is scott rederick. mcdonald's franchisee in california who owns and operates 18 restaurants in the north part of the state. scott, tell us what it's meant from your perspective. >> well, good morning, becky. thanks for having me. the days now dawned upon us

countless operators in california face a $20 minimum wage. it's going to be the most serious challenge for entrepreneurs that do business on the franchising platform. the vast majority of these restaurants run by small business proprietors who do business on franchising platform and the vast majority being family-owned and operated just like my restaurants. i want to underscore the words "family owned" because franchisees are on large global corporations. might be national in name but franchisee are loecal organizer. as you stated earlier regarding it is absolutely the intended consequences and for many what makes this legislation unprecedented let alone extraordinary, it only benefits employees who work in franchise

restaurants. whether you own one doughnut shop or ten doughnut shops in california, if you're part of a franchise brand with 60 or more locations, the new wage mandate is going to apply to you. and as you just stated, this is an extraordinary wage jump. 25% overnight. a serious concern for two reasons. first, it targets only fast food restaurants, and second, the sheer scale of the impact is breathtaking. historically, you said about stepladdered approach. many cities studied and put forth living wages with annual cpi bump. certainly the city i opened my first mcdonald's in, san francisco, chose a fair living wage. set annual cpi cap allowing us to plan for that as small business owners. fair to employees and fair to people who grant the jobs. >> we've already heard that some pizza delivery stores, for instance, have laid off or

gotten rid of 1,000 jobs or more ahead of this. they're just not going to do that anymore. use uber and lyft apps to go ahead and have deliveries done that way. uber and lyft don't have to abide by that because their employees are not employees, they're contractors. work-around that will happen with this. what are you doing in preparation? will you lay people off or are you going to find other ways to make up and make good for that 25% increase in wages? >> well, obviously my team is focusing on every possible action to survive and maybe even thrive in what will start today. obviously one of the most critical levers i can use as a business owner is price, but i certainly can't charge $20 for a happy meal. so i've got to be aggressive in seeking labor efficiencies to drive top line. accelerate the digital channels even more. got to promote more off-premise delivery. families are going to have to make very hard choices around

capital x expenditures. postpone a restaurant or dining room? invest in a new rooftop? and bigger question open a new restaurant in california against these extraordinary legislative headwinds? topic of the day seems to focus on obvious move to cut labor, or reduce staff size. frankly, at least in my organization, that's the last thing i'd want to do. people in my company and it's been this way 30 years are my greatest single asset. the last thing i want to do is impact the folks that run my golden arches. you pointed out leading up to today even, pizza hut and roundtable pizza laid off 1,500 drivers up and down the state in an area can i do business in, redding, california. end of january, 18 subway sandwich shops closed overnight. a harbinger of what will come

and i will do everything i can positive protect and defend my equity and grow my companies and to thrive in communities. >> thank you. owns 18 franchisees of mcdonald's in california. appreciate your time. >> thank you. coming up on the other side of this, how washington, d.c.'s mayor managed to keep two pro sports teams in the city and fend off an enticing offer from virginia. the d.c. mayor will be with us in just a little bit. "squawk box" returns after this. bringing you an elevated experience, tailor-made for trader minds. go deeper with thinkorswim: our award-wining trading platforms. unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. and sharpen your skills with an immersive online education crafted just for traders.

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we are kicking off second quarter of trading with a look at tech stocks and the best performers among the magnificent seven -- maybe it's now really the fabulous four. talk tab straight ahead. plus washington wizards and capitals staying in d.c. we have the mayor of d.c. joining us live how the plan moved to virginia fell apart and what she did to keep them there. plus, at&t investigating leak of customers' data on the dark web saying the personal information of 73 million current and former customers compromised. the final hour of "squawk box"

begins right now. good morning and welcome back to "squawk box" here on cnbc live from the nassdaq markt site in times square. i'm joe kernen along with becky quick and innisbrook resort. powering ahead seen since really end of last year and all this year. up another 97 points. nasdaq up strong. treasury, ten year pretty well behaved even though we've had a slate of maybe hotter numbers than you would have thought with inflation, but up about 4.21% now. ten year. >> among today's top business stories, u.p.s. announcing an expanded partnership with the united states postal service and will become its primary air

cargo provider. this as fedex will allow its contract with the u.s. postal service to expire end of its term in september. at&t says that it is investigating an incident that took place two weeks ago leading to millions of its customers' data published on the dark web. they've reset pass codes of the 7.6 million current users impacted and actively contacting them. along with the more than 65 million former customers whose data also was compromised. that stock now down by about 2.5%. and jobs week in america. getting adp private pay rolls wednesday. weekly jobless claims. international trade data thursday and unemployment report friday. expecting fourth straight month of at least 200,000 job gains. the estimate versus the previous number 275,000. >> okay. back to the markets. get you ready for the first trading day of the second quarter. senior markets commentator mike

santoli at the new york stock exchange this morning. what do you got? >> andrew, actually over at headquarters. the picture is the same. it is quiet strength in the pre-market futures and s&p 500. the mode all year. look at the six-month chart of the s&p. just an incredibly sort of tight up trend. haven't had a 2% decline. any way you slice the way the market performed whether up 10%, in the first quarter of the year. whether it is up five straight months, whether 80% of all s&p 500 stocks finished march at a one-month high. all of that stuff translates into, yep. over the next 6 to 12 months, maybe shorter, intend to see higher prices. doesn't peak but sets up in theory for more chop with a 10% first quarter. smallest decline the rest of that year was 4%. that was back in the 1960s. expect normal pullbacks but still is seems like this is a strong and broadening market. look how the s&p 500 did

relative to tech sector. for a change tech underperformed by a little bit and, in fact, all that underperformance really apple down 10% in the first quarter and represents something like 20% of the tech sector market value. showing you a broadening financ net positive. among this public getting excited. you see crypto related stocks, what they're doing, other broken ipos of 2021 revive pd and retail trady proxies robinhood and coinbase up more than 50% just year-to-date. still below peak prices if you go back a few years. then buy and hold kind of plays, which would be schwab and blackrock. not doing a lot, participating to a modest degree. shows a little bit of kind of excitement and enthusiasm. arguably, speculative juices flowing. see how that plays out.

>> okay. mike santoli, we will see, and continue this conversation right now. >> and a look at the markets as we kick off the second quarter, peter crouse, ceo chairman of aperture investment. i don't want to put words in your mouth. i think you think we're restrictive and slowing a little and seeing it somewhere as a result we will see some cuts and that's going to make small caps just take off. do you need to even say anything now? >> i think that -- >> can you -- fill in the blanks. >> fill in the blanks. >> convince me, well, convince me you're seeing pockets of weakness in the economy and where are they and why aren't they obvious to everyone? >> i think when it's obvious you have a recession and you have significant decreases. you can see earnings growth slowing. particularly in the small caps space. look over the last two quarters, you saw retail stocks, consumer

stocks, consumer discretionary stocks having slower growth over that time period. even the large cap stocks. ex what andrew referred to, the magnificent seven, revenues continue to grow at faster rates than everybody else, we see that evidence actually is there. some stocks actually reported that, small cap stocks, reported in the next few quarters they think they're going to accelerate. there's a feeling in that sense that executives think they're at the trough. if, in fact, you're going to have lower rates, if, in fact, the last two years higher rates restrictive growth causing small caps to underperform large cap 9% a year three years. big number. locker periods of time small cap and s&p basically equalling each other. equal returns. not reason to believe if interest rates are going to decline and we don't have a

recession -- couldn't, but if we didn't, small caps perform. >> and interest rates will climb, we think. we thought six, maybe five cuts. then, well, maybe we'll get three. now people say, heard people say get one cut. i don't even know why you would cut, one. that's assuming that the next move is not an increase, if inflation stays bad or even comes back. >> yeah. i think there's -- >> we are -- >> yes i think -- no chance for increase. fed is definitely in a tricky situation. they cut rates too quickly and inflation accelerates, a terrible place to be. >> your whole thesis based on them cutting, for small cuts? >> yes. i do think the fed has to cut at some point. my thesis, not increase rates. my thesis they will be slow in cutting rates. said that for -- >> why cut at all?

because you think there are -- >> unnaturally high cash rates. you don't need cash rates at this level unless attempting to restrict growth. every reason to believe they will cut rates and get down to a normal position. >> and inflation pointing in the wrong direction? numbers on friday, pce? >> numbers of erratic. not just going up and not just going down. you know? we'll see what the numbers are this week. >> going up and revising last several months higher. >> some revisions higher. look, i'm the first hawk on inflation sticking. people said inflation going to fall like a rock and never has. i didn't think it would, but i think you've had two years restrictive activity and beginning to see breaks in the broad economy. altese in europe downgraded ccc. a major company. we'll see more of that. seen bank struggles, real estate struggle. things out there are obviously

impacted by higher rates. we need to see consistency in data and the fed said that. don't be confused. that's what they mean. >> do you worry about stagflation? >> no. i'm not worried about stagflation. if i have a worry it's that we have a recession. that would be my concern. >> the move we've seen in the markets, you attribute to what? >> well, again. you know, if you look over time, the markets are not really outperforming by that much. >> finally caught up after a couple years. >> i mean, in fact, from end of '21 to today i think the compound growth is like 6% or 7% or -- even less. maybe it's 4%. not light a market is -- >> the expected easing? strength of the economy? as far as earnings? what was it? i mean, sensitive so negative.

most hated bull market in the world last year, entire year. right? >> look, yeah. i -- took me a while to turn. but i think in the last six months, you know, the markets look attractive enough to invest in over the long run and die think the fed is going to have to reduce rates, and if you don't have a recession, which we could, but if you don't, i think the market's cheap. >> you think there's some canesian benefits? come due at some point down the road? do you think some of it is, allocated money for chips, infrastructure, ev transition, any of that stuff? all that money sloshing around still? >> i definitely think that some part of the fast rise in inflation was a reaction to covid. and the fiscal stimulus created. >> so that's still around? >> sure, yeah. but it's less than it was, and

it's petering out. you see consumers increasing their borrowings. you know, one of the great benefits we got out of a very low interest rate is, i don't know what percentages are, 60% 70,percent of homeowners have incredibly low mortgages. 3.2%. think about discretionary income created at a consumer level is still there. not going anywhere. still there. people are in control of that if they want to sell their homes, pay higher rates they can. if they don't they'll continue to have discretionary income. that's helping the situation, i think. helping the fed keep rates higher and slow the economy down and i do think that may be one of the reasons rye there's not a recession. >> and i was going ask you about -- forget. >> adds to the inequality, though. first-time homeowners. >> sure.

absolutely. that -- one of the reasons why actually if you get to some stability you actually see a pick up in housing, because there are a lot of first-time homeowners haven't been able to buy, because prices have been elevated. there is pent-up demand. look at rental markets. why inflation doesn't come down that fast. people have to rent. >> when will we see crowding out in terms, every time we do another option for $33 trillion. how do rates come down? nice because of the deficit? how does it, how do you get that over the yields? >> talk about where we are in the yield curve. now talking about further out in yield curve. not the short -- the question is, is the ten year at 4.2% fairly priced? can you really get people to buy all the paper they have to buy at 4% or 3.5% and personally i've never thought that. i actually think that the u.s. government's going to have to

pay up. it's still happening. >> still happening. >> you need 150 to maybe 200 basis points of real interest, real return. >> to go ten years. >> if you have 2% inflation rate, you're going to have 4, or, you know, at least 3.5. no surprise at all. >> short rates come down? >> short rates come down. >> long rates could go up. >> they could go up. >> you wouldn't be shocked if they did? >> no. what if inflation bottoms out at 2.5? you have a 2% real rate. that's 4.5. and 4.5% ten-year treasuries is not even unusual. in fact, 4% treasury at 10% rate is more unusual. >> all right, peter. like the glasses. i see you got the -- >> glad i excited you today. >> matching watchband. no. andrew looks at your tie. we check everything out. >> got the purple socks. whole thing. ensemble and it works.

it does. >> how much attention you pay to the men. >> we do. >> for a minute ask people, do you worry about something -- wayan worried about it? you know his history. you're not worried about anything. i mean, maybe your clients you're worried, but peter, himself, has nothing to worry about. >> you didn't ask me that question. >> from his professional perspective. >> right. professional, right. >> me, worry? >> when we come back wizards and capitals staying in washington, d.c. after all. we will talk to mayor muriel bowser how she kept the teams from moving to virginia. and later, kevin hassett joins us on the latest inflation data and the fettle next move. we'll be right back.

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welcome back, everybody. the washington wizards and capitals will now stay in washington, d.c. until at least the year 2050. that's thanks to a $515 million deal between d.c. mayor muriel bowser and the oewner of those teams. the mayor joins us with the details. mayor, we say first of all, wow!

this is quite an upset you pulled off, because we had virginia governor glenn youngkin on the program in december announcing he was stealing those teams and they were going to be relocating. what happened? how did this all come together? >> well, we all had the feeling of "not so fast." these are our teams and believe d.c. teams should play in d.c. and put a very strong offer on the table back in december and since in a day we've been working to make it even stronger, to build a great infrastructure around it, and to put that back in front of the team. >> i was reading a story from the "washington post" about this, and it sounded from a point of view you were mad when this first happened then ran into him accidentally in a hotel when he was there for a conference and were you there for a separate meeting. was that really an accident? >> it really was. you know, downtown washington has places, waldorf astoria one

of them. i take meetings there frequently. coffee meetings. i saw him. excused myself from my meeting and said, look, i'm sorry but this is a conversation that needs to happen today. >> i mean, that's really incredible, how you were able to put your frustration aside and build a productive working relationship. what did you do differently? i think part of what happened here is, governor youngkin and the virginia legislature didn't see eye-to-eye. couldn't get the package passed. you clearly went into overdrive and managed to put together a lot of things. what did you know you needed to do as a city to keep these team where is they are? >> well, one thing that we recognized was there was a lot of risk in the deal that the details were very scant when it was announced in virginia. and we soon just learned that it sounded too good to be true, and

it probably was too good to be true. what we had was a real deal. we had the ability for the teams to renovate and play here at an iconic location where they've been incredibly successful. one thing we know over the last three years, post-covid years, they've made more money here, had more ticket sales here than in their history. so what was missing is how this building could be modernized, speak better to the downtown and grow. we had to sell them on a growing right here in place, an urban campus, and we've done exactly that. and more than that, we listened to the type of infrastructure they wanted to see around the building, and that's something that we've been working on. how to reimagine our downtown. we issued, i think, two really important plans. a d.c. downtown action plan. a gallery-place task force at work and also just change the

public space. all of that makes for a very interesting project. so if you want to, a project for your lifetime like ted has mentioned, this is it. >> and mayor bowser, there's few cities in the country that when you're young, if you get a chance to live in d.c., it's like, i'm going to do it, and such a vibrant, amazing place, and the seat of power and everything else. >> thank you. >> a "but" coming because my daughter's there and i'm a nervous person already. she's in her 20s. i already worry. she worries. she's scared. doesn't feel safe. she had her place broken into. someone got shot on her block. and she wanted kn ed me to just you. what's the answer? do you have a plan? broken windows? got to do more of that or more funding for police? what's the plan? should she feel safe in d.c.?

mayor bowser? >> absolutely. this is what she should know. i just got an update from my deputy mayor in crime that's down in all categories in washington, d.c. especially those categories that so troubled us last year with robbery and carjacking. down more than 30%. so we've done the things that we know will reset our public safety ecosystem starting last summer with an emergency crime bill, and most recently in just a couple months ago with a new crime bill that really will reset our public safety ecosystem. so we feel very good we're moving in the right direction. not just with crime but with attendance up in our schools. with our population growing. with new restaurants opening. more per capita than any place in the united states. in fact, right in this very building this month they will welcome 400,000 visitors. even with a sold-out show

tonight. so people like your daughter are voting with their feet to live in the most exciting and important city in the world. >> is it a -- we had recently, you know, in this town, our mayor talking about recidivism and trying to deal with that with the recent tragedy that we had. i know you probably saw all the policemen and 10,000 people lining the streets of long island. >> yes. for sure. >> and there's just a notion maybe sometimes some crimes are classified like they used to be. so it looks like they're down, but -- i guess the point was, if criminals aren't afraid of what's going to happen to them for minor crimes, then, you know, is there going to be a no-bail release or not going to do any time that theydon't respect the police, and they're not afraid. you know? they do whatever they want basically and it becomes lawless. there's nothing to that?

>> well, this is what i can tell you, and what i have engaged my legislature with over the last year. that's making sure what i call "resetting our public safety ecosystem." that it is based in accountability and it's based in giving people opportunities to go on the straight and state on the straight and narrow. and that's what we see. that's why we see, i think, the very dramatic increase that we're experiencing this year. sometimes it takes time for people in the press and the community to really hear and feel that progress, but i see it every day in the energy around the city and the very brave men and women that protect our streets each and every day. so anyone who's interested in working for a very progressive law enforcement agency, great benefits and live in the best city in the world, mpd is hiring

in washington, d.c. >> mayor bowser, the virginia legislature couldn't get this through and some of the complaints were that this bas too much of a giveaway. that they were offering. your package is a pretty big package as well. $515 million. is it worth it? >> it's absolutely worth it. we see monumental as a very important company and employer in d.c. over 1,000 people work here. they earn a good union wage. and it is very important to the businesses and restaurants that surround it in downtown washington. so we very much want monumental sports to be a part of the downtown comeback, and we've had that discussion with our legislature back in december. a unanimous resolution was supported by all the members of the d.c. council, and i actually expect them to vote tomorrow by

emergency to authorize the $515 million partnership with monumental. >> you said you knew it wasn't a done-deal with virginia. the announcement waiting because the paperwork wasn't signed yet. has he signed the paper work with you? >> we were. on this court behind me we signed the terms that would lead to our final agreement. so our process, we expect it to be a shorter one. council votes tomorrow. they'll vote on my budget and then we will produce our development agreement. and right after that, we can issue the bonds that will help them start a three-year renovation here. >> mayor bowser, thank you for being with us today. pretty interesting story. >> thank you. >> okay. coming up on the other side of this, talk about the performance of the magnificent

seven's tech stocks in the first quarter. joining us in just a little bit. mark hayes. reminder heading to break. get the best of "squawk box" in votesquawk pod. fari podcast app and listen anytime. we're coming right back. abouto g magic.

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welcome back to "squawk box." this morning futures in the green this morning though not as high as we were before. dow jones just up about ten points. nasdaq up about 29 points. looking at up 100 on both. s&p 500 up about two points. big weekend at the box office. if e went to theaters "godzilla" second domestic weekend for moving this year behind "june part ii" monster adventure. expectations $50 million to $55

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welcome back to "squawk box" here on cnbc. watching futures. a mixed picture this morning. seen the dow up triple digits out in giving back indicated off 30 minutes. s&p given back gains. flat. nasdaq up by 90 points about two and a half hoursago indicated now up by 24. weighing on the dow united health, biggest drag. down by just over half percentage point and procter & gamble, mcdonald's, looks like broader issues impacting things. not one dow component dragging things down and nasdaq and s&p giving back some gains. gold prices, were significantly higher. >> whoa.

>> yeah. >> still are. yeah. where we were earlier. gain of well over 1%, close to 1.5%. then bitcoin prices, which are still at 69,730. look, part of this may be people coming back from vacation. a three-day holiday. first day of the quarter and a lot of interesting things that happened from a federal reserve perspective with pce hotter than anticipated on friday and then comments from jay powell suggesting that they may be a little more patient as well. >> next guest says that while strong consumer demand in government spending have kept gdp up, the data is inconsistent with inflation being under control. joining us now, hoover institution distinguished fellow, visiting f ing fellow, hassett, senior advisor to former president trump. kevin, welcome. good to see you, as always. is it, i mean -- do you at least acknowledge that this is not

like a normal sort of an economy that you can just put a label on and say it's just, like, monolithic, one way or the other? there's something for everyone, depending what your viewpoint is. >> you know, and i've been looking at the data lately, joe, and you know, i think we're getting close to the 30th year that i've been coming on "squawk box." if i can add back then in the '90s -- >> talking about it. 1995. you're right. it will be next year. >> talking about the internet and i can remember that everybody saying this internet a really big thing but the market kept getting surprised on the upside by the internet. five years in a row, average, what? 30% returns. i'm not saying we know that's what will happen now but all of these really smart people. eric schmitt, bill gates saying artificial intelligence is bigger than the internet. market watchers and economists

we should start to look for signs something like the late '90s might be happening's if it happens, fiscal policy and that other stuff became much less important because of the productivity boom eventually was in numbers from computers. right now by colleague at stanford doing a lot of path-breaking work showing gains from switching a.i. on companies can be 10% to 20% increases in a month or two. why are equities and graphics soaring? probably starting to see scientific evidence that a.i. is the big, major story. >> kevin, do you think -- >> i was going to say, one last thing. against the backdrop, irresponsible government spending policy, massive government debt and, one hand think of a lot of bad things could happen. the other hand, good things continue to happen. >> kevin, some sort of view that this might's premature insofar as if you -- to make the a.i. case you have to believe it's

actually impacting employment and look at employment numbers, going up, up, up's. you would think hthat has to reverse to capture productivity numbers. that only happens if less employment. not more. right? >> or the people that are working become a lot more productive. kind of at full employment. if you want to have growth you have to take the people in jobs right now and jack up their productivity. to do that labor goes up and gdp can. you're right to be skeptical for sure. what we have now in hard evidence, three, four interesting studies controlled experiments and stuff. but the studies are in places like call centers and so on. you would expect to see huge effects. something that might be happening, but i, what i'm trying to think about what's going on with profits and markets. then it's kind of the best explanation for me and i mentioned in my email to you guys one of the thing really striking, while markets continue to surprise on the upside, it is

that capital spending has been going south two quarters in a row, and right now look at gdp now, atlanta fed, declining third quarter in a row and so supply is going down while demand is going up because of lots of government spending and consumers staying strong. that's a recipe for inflation. >> right. so you think we're in restrictive territory? keep asking everyone that today. if you were, if you were head of the fed i want to ask you about that in a second, but if you were head of the fed would you be considering cutting rates this year? >> there are risks on both sides, and i can think of really good things that can happen. again, productivity shock, a positive supply shock putting down pressure on inflation. we get really convinced this a.i. story is real, then i can imagine you could take your foot off the brake a little bit. on the other hand, i respect what the fed's been doing. signaling maybe getting ready to

cut. when data comes in stronger, responded to data. what a responsible fed should do. the thing that bothers me with all the strength we've seen last two quarters average 3.5, 4% gdp growth. inflation. last eight months annual c you'llized, 4%. suggests not there yet. market futures price at a cut in june. that's kind of a communication error. i don't think they'll be allowed to do that, the data. one thing i disagree with jay powell. signaling cuts soon. there's nothing like that in the data to me. >> what about the letters behind you? distinctive signature. is that 45 sober? >> those are the, right here in my office. those are the notes that appointed me chair to council of economic advisor and member of the council advisor. >> signature on the right,

right? very distinctive. that's not a letter asking you to be the next fed chief from -- from -- that's not what -- we can't see what it says. >> we'll see what happens. >> would you take that job? >> it's crazy to speculate about stuff right now. it's like the cart before the horse we don't really even have a horse yet. so i think the appropriate thing to do is talk about policy for a person like me and let people think about whether they think policy views are views of someone you agree with. >> fortunately, just gave every modern monetary theorist a -- get out of jail free a.i.'s goi our $34 billion built-up risk. >> we see it in productivity inflation going down. a.i. is real. it's not real yet. >> not yet, but -- why do we not

see more crowding out? why are we not -- at 100 and whatever percent of debt to gdp, headed to -- whatever we're headed to. just because of what we've already spent. why isn't there more trepidation, do you think, kevin? because of a.i.? >> no. i think that what's been going on in the u.s. is something that's not sustainable but can last for a while. think about it this way, joe. nomenable gdp went up less. debt up by 150. end of the year say, was that a good year? only looking at income feel goods, look at debt, too. talking about future fed policy. the thing that i have to say, though, is that if the government continues to spend so irresponsibly, then getting inflation under control is extremely unlikely for the fed, because they're, again, borrowing 150 to give you 100 in income and where's the 50 come from? you're right to be skeptical

about it and the fed monetary policy was very accommodating beginning and still unwinding that, and yeah. i think that in the end it's -- if there's not some kind of fiscal consolidation in the u.s., jobs looks really, really difficult, the job. >> go to have you on agency always, kevin. i hopeyou'll remember that relationship. 30 years. if you do get that big job some day. we'll look for, we can have him. jay clayton. there's reasons for you, maybe, not to be quite so strident. it might really benefit us in certain ways. know what i'm saying? right? loss of democracy and all, but this part could -- for the show, for "squawk box." it could be good. >> i'll stick to the other side of this. >> all right. you're kidding! thanks, kevin. all right. when we come back, the breakup of ge set to be completed tomorrow morning when ge aerospace beginning trading as a

stand-alone company. phil lebeau has that story next and then talk tech with mark mahaney. "squawk box" will be right back. . in 1935, ge powered the first night game. and changed the way we see the game, forever. now, we're changing the way we see the future. taking innovation to the skies. with better, faster, more sustainable technology that lifts people up and brings them home safely. electrifying and decarbonizing the planet. helping to make tomorrow brighter—for everyone. bottom of the 8th, we're all knotted up. swing and belt.

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the breakup of general electric will be complete tomorrow and it will usher in a nur era for ge aerospace. phil lebeau joins us with more on that front. hi, phil. >> becky, ge aerospace becoming a stand-alone at the right time in terms of tailwinds. sorry, had to use that pun. all tailwinds behind the ire oh space industry right now. for ge aerospace services revenue climbing. order backlog continues to grow. a leader more profitable company.

how much more profitable? 2024 $5 billion. free cash flow. just the start. the plan 70% of cash. a huge generating cash company. 70% going to investors in the form of stock buybacks or dividends and for larry, a chance to say, larry culp, we knew ge aviation was the crown jude of ge. now it's time to really push it into a higher gear. that's through a leaner, more profitable company. i spent part of last week as you look at shares of general electric. at the wing's club together talking what the next few years looked like. incredibly optimistic and believe the goal of a $10 billion operating profit by 2028 is more than realistic given where the industry is right now. bottom line, for a long time people said you could ever just break out ge aerospace. let that go on its own, it would take off. and it is prime to do that once

it starts at a stand-alone company. trades tomorrow at a stand-alone company with spin-off of ge vernowa. >> a company with potentially largely impacted by the issues at boeing. >> yep. >> larry culp a guy who knows manufacturing and understands these processes. i read recently somebody asked if he would consider head spot at boeing? >> yeah. >> all interesting questions surrounding that company. >> i asked him about that last week. >> yeah. >> yeah. i asked him about it. he's been asked about this from other people. his response is, it's taken five years and really some long, arduous work in order to get ge to the position where it's at. remember where this company was five years ago when he took over. people, becky, talking about bankruptcy. literally, for general electric. now look at it. i think that he is more than happy. he has said he is more than

happy with where he's at, at ge aerospace and has no plans at all to move and to leave ge aerospace. i think he wants to enjoy what they've done here and put together, and what the future holds. >> it has been a pretty amazing run over the last five years. the obstacles that they had to deal with, that larry culp and has team had to deal with, and kind of seeing this come out th amazing transformation, and doing what a lot of people didn't think could be done. >> right. and what's often overlooked, becky, is the fact that it is a much leaner, much more profitable company, and that's where the growth is going to happen in the future. yes, there are tailwinds in terms of global aviation, more flights, older airplanes being -- that's good for them, because of the services revenue, but at the end of the day, you have to become a leaner, more profitable company. he's known that from day one when he took over, and that's really been part of the focus,

and they're just starting to see the fruits of their labor in terms of making that happen, and i think that's what people are going to be focused on over the next several years when it comes to ge aerospace. >> i think for long-time watchers, you see $175, even when you do the math, i remember, what's that come to, phil? i don't know where it is now. like 20 or something? but remember, ml was buying at $28 on the way down, and welch had it up to $60 at one point, but the market cap is impressive here. it's back to $190 billion. it was $600 million at one time. i don't know whether that was rational or, you know, how you got to that point. >> it was a far bigger company, joe, obviously. look, we were part of ge at that time. >> and it was a 50 times earnings and it was because you could always count on a three-cent beat quarter in and quarter out. but you know, $176, you do need to remember all the

restructuring and rfeverse splis and everything else, but it is back to $190 billion. there's no -- you can't fault larry culp for what he has been able to do, like a phoenix, really, from the ashes. >> yeah. i like that. good analogy, joe. >> thank you. right? you ever notice it just rolls right off my tongue, phil? you know what i'm saying? how that happens. it's really unbelievable. keep that in mind. >> thank you, phil. coming up, a big first quarter for internet stocks. we'll talk about them, how the a.i. boom, regulatory challenges impact the sector in the next quarter. mark mahaney is going to join us to talk about it. you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star!

be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart!

welcome back to "squawk box." we are just over half an hour away from the first opening bell on the second quarter, and we want to bring in mark mahaney to talk about the internet and tech stocks and what he thinks is going to happen. head of internet research. good morning, mark. >> good morning, andrew. >> trying to understand, and "journal's" got a good piece on it today. we had the magnificent seven. we're down to the fabulous four,

maybe. i don't know if you agree with that, and maybe that's a good thing because the markets seem to remain resilient, even in the face of three of those stocks not doing well. is that a good way to think about this? >> i'd probably still stick with the fab five. >> who's in your fab five? >> the only one i would add to what "the journal" had was google. you've seen a nice recovery. there are too many overhangs on google. for the first time in, i think, three years, i've preferred google to meta. we have had a wonderful run in meta, and i think the overhangs, though -- so, a lot to really appreciate about meta. what i'm struck by with google is there's a couple of things that are very fixable on their part in terms of cost structure, paying a dividend wouldn't be hard for them to do that with $100 billion in cash, and i think it's underappreciated as an a.i. asset. i know we had some controversy over the images by gemini, but the tool is extremely powerful. you're going to have problems, and it's never going to be perfect, but i think we're going

to see ourselves using google and gemini more in the future. the regulatory issues are significant. there's one silver lining -- go ahead. >> how are you thinking about google or gemini in the context of what we keep hearing is going to come out from openai in terms of leap-frogging again? i don't know where you think claude is from anthropic on a relative basis. it feels like there's so much competition in this space, and potentially other competitors that are ahead. >> yeah. it's a highly competitive space. i don't know that there are that many competitors. the scale of resources, computer power and cash you need to run these models and run them at scale, the fact that maybe as a data point that apple is outsourcing, probably, to gemini, like, if apple doesn't want to do it themselves, and they've got plenty of cash, but if they don't have the resources or the know-how, maybe that says something about how, at the end of the day, there's just a handful of companies that can really do this at the kind of scale that microsoft is looking at and google is looking at. >> do you think the quality --

what gemini is doing is better than what the competitors are doing? i'll be honest. i use claude now. i use openai, chatgpt. i don't use gemini, because i don't find that the answers and the things that are coming back are at the same level. >> you know, these are hard things, and they're going to constantly innovate. i'll give you two quick simple examples. go ahead and run, why is it called march madness? how can i buy tickets to march madness? do that on gemini, chatgpt, and you'll find the answers pretty similar, slightly better on gemini. that's just a random example, but it's useful, timely. i think google is in this race, but i think the more important point is, i think they're sort of more perceived by the market as gen a.i. roadkill than as a derivative play. look at what meta was able to do in terms of improving its process, its offerings for consumers and advertisers. i think google is doing the exact same thing. that's not reflected in the stock. that's why i like google here. >> okay, so, what do you think the stock should be worth a year

from now if you're right? >> i think our price target is $160. could there be upside to $200? yes, possibly. it's not our top pick. that remains amazon, another one of those fab five names, and i would put meta up there, but amazon first, google second. >> who's fourth and fifth? >> well, in the -- leveave asid the fab five. we like names like dash and expedia. overall trends, demand trends are positive this year. these companies have caught cost religion. they're not hiring like it's 1999. i think we're going to have more shareholder-friendly activities, and i think google is going to start coming out to surprise people and start paying a dividend. i think a.i., just as a fundamental tailwind, is there, and you're seeing more and more examples of companies approving of products and processes using a.i. it's a good reason to stay long the highest quality names. >> mark, always good to see you. we appreciate it. we'll talk to you again very

soon. let's get a final check on the markets. it was kind of interesting. we were up over 100 across the board, and then the dow and the nasdaq -- and things turned around. we're now down about 11 points on the dow. nasdaq, still positive. we will do it again tomorrow as we head towards 30 years. i can't believe he mentioned that. 30 years of "squawk box." still love it. make sure you join us tomorrow. "squawk on the street" is next. ♪ good monday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber's back at post nine of the new york stock exchange. we kick off q2 at record closing highs. best start to a year since 2019 for the s&p. big week with tesla delivery data, disney's annual meeting, and a jobs number on friday. our road map begin