remarkable year. the stock up 22%. we appreciate seeing you. thank you for touching so many different topics this morning. >> andrew, i think the thing that jumped out to me is his strong take on regulation and how overreach in regulation is really changing things. it's something we hear from a lot of businesses, but andy jassy speaking out very forcefully on that. right now, it's time for "squawk on the street." >> good thursday morning, welcome to "squawk on the street," i'm david faber. he is jim cramer. we are live from post nine at the new york stock exchange. hey, look, there's carl quintanilla. he's in boulder, colorado. that's ahead of tonight's premier of cities of success, denver and boulder, which airs at 10:00 p.m. eastern. let give you a look at futures right now. we get ready to begin trading 30 minutes from now. we're looking for -- i don't know what you want to call that. >> ppi scooped.

scooped all the bears. >> that's where our road map begins this morning. the inflation picture, of course, is what we're talking about. we've got wholesale prices increasing less than expected, as jim just said. two banks also lowering their rate cut expectations. that's off of yesterday's cpi news. we're keeping an eye on big tech as well. nvidia shares, they're bouncing ahead of the open. jpmorgan, lowering its apple price target, and you just heard from amazon's andy jassy, saying so many different things, including the fact that he's committed to cost-cutting while investing in a.i. plenty of other stocks to track this morning. nike, airbnb, chevron, occidental. we'll go through all the upgrades and downgrades. let's get to the broader market here. first, let's get a reaction to ppi after yesterday's selloff on the cpi. >> there was a lot to like. i think there's a lot of confusion about these numbers. i find that what's happened is that yesterday, there were a lot

of mistakes in the data. >> what do you think by mistakes? >> they're not taking into account a lot of e-con. for instance, they had apparel up. the largest seller of apparel after amazon is temu, and temu's lowered the price. >> and jassy just said consumers are trading down. i heard him say that at the very top of the interview with andrew. >> they're getting good value. the average price yesterday of footwear on temu was 89 cents. how can you not include this in the cpi? ppi is a little more intelligent. food was up big because of the avian flu. i think if you look at the way they do that, the labor department, i would go in there and clean house. i would do a little "deadwood" chainsaw. what else here? because i think we -- i'd like to go to carl, because i need some optimism right now. >> you're not going to get it from carl right now. >> why not? that sunrise scene

>> he looked great as always. >> that's optimism. >> it's going to be, well, he's going to be with "cities of success" tonight at 10:00. >> are you saying the deck is stacked? >> no, but what i think is you seem to want to emphasize the ppi today as opposed to the cpi tomorrow. we had a significant selloff as a result of that cpi number. everybody now coming way back on their expectations for rate cuts during the course of this year. i don't know if many are now coalescing around one or two. certainly not june. >> i just think that -- >> ppi number's not going to change that. >> we got to keep perspective here on -- if we didn't have these aggressive projections on rate cuts, we would be, like, okay. not great. but let me tell you something. you raise -- the thing that worries me most is rent and housing. remember, housing is out of the cpi, because in 1980, they were worried about housing inflation. they wanted to make the number look big. we have an immigration problem, and we also, if we raise rates in the affordability of houses, it's going to get even worse. the fed's in a box on housing.

>> some people would also say the fed's -- it's not their problem, but richard fisher was on yesterday talking about it again, that auction yesterday, by the way, didn't go as well as it might have. >> the auction -- >> meaning, concerns about so much -- so much supply to help fund our deficits and not enough demand, and that's a concern as well this year. do you share that concern? >> no, i am concerned about that, because huge supply. i mean, just dramatic supply. our man in chicago is -- he's grading real hard. santelli is grading real hard. >> he's whatting? >> grading. >> not grating. >> he's grading. >> with a "d." >> watch yourself. with a "d," not a "t." >> i'm just trying to figure out what you're saying. >> what matters to me here is when i got a "d" once in biology, i went to see the professor. he asked me how i'd done all my life. i said, i got nothing but as.

he said, this is going to be a great learning lesson for you. i feel this "d" was a great learning lesson for people. supply is probably more important. >> in terms of the grade yesterday on that auction is what you're talking about. again, we're talking about the treasury market here, which obviously is very important for the performance of the equity market. at least, it was yesterday with rates moving higher and stocks moving lower. >> thank heavens we offer better rate than a lot of other parts of the country. >> there's a look at the ten-year. >> oh, come on, david, you've been around when the ten-year was 7.9%. >> i have, i have. >> enough. >> i have actually been around when it was higher than that. >> i remember when you were wearing that jacket for 7.9%. >> in the late '70s. actually, with volker, we were hitting, what, 18%? >> poly and esther,my two girlfriends in that jacket. >> thank you. >> i happen to think that andrew's amazon made me feel really great. >> why? >> because spending on a.i., he obviously has a very positive

view on a.i. a lot of people yesterday were in a.i.bubbleville. you ever notice when everything's bad, it's like people come out and say, before i get at the cpi, let me tell you what a joke a.i. is. yesterday, people reacted to the futures, and i hate that. have some gumption. have some backbone. futures are bad, i hate a.i.? >> two excerpts from andy jassy's interview, the first on the consumer and spending. let's take a listen to what jassy had to say, of course, which is from what is the largest marketplace out there for many americans. >> it's going to take a lot partner people not to buy detergent or shampoo or things like that. you can see that in the growth of our everyday essentials business, which, last, q4 of 2023, was over 20% year over year. some of that is because people are going to buy all the time, but some of that is because of the speed we have, and we're getting to people, but people are still -- they are still buying.

they're just being careful about what they shop for. >> kind of interesting. being more careful. >> when i was up there to talk to him, one of the things, it's so easy to be careful, because comparisons are just incredible. it's not like the supermarket where over here, it's this, the sizes are different. the head-to-head is so easy. remember, they put the chinese on. the -- they put -- one of the great things that jassy did was say, you know what? i will compromise and charge a little more for temu, but we'll give you a date of when it comes, and people turned out to care more about the date than the actual price. i'm focused on temu because it is 100 million people in this country. >> yep. >> i tried temu. i told you what happened >> as our viewers may recall, you tried buying your wife a bathing suit, which i have said previously, was one of the dumbest things. >> she's not a smoker. we had no problem with the

fire-proofing thing. the only thing they left out of it was asbestos. as long as it's not friable -- >> secret way of trying to see if you could get a divorce. it had to be. that's the only thing you do that for. >> it was black. it looked cool. >> you're even going on temu to take a look at some of the bargains. >> i go on temu constantly to see how much i pay when i go to tj maxx. >> is it really the same quality of stuff? >> kind of. they're both plastic. >> tj maxx has some great stuff, come on. it's one of the great retailers in this country, as we point out. it's got a market cap so far above target's, for example. >> 1,300 stores. it's fantastic. but i think that people are looking at dove. they're not looking at dove and kohl. they look at dove and then ivory. >> i'm going to use jassy to transition us to nvidia.

take a listen to what jas sy ha too say. >> most of the early a.i. models were built by nvidia, but supply is more scarce, and people are concerned about cost, so we've built our own custom silicon in a.i. we've built a training chip that are meaningfully more price performant than what you can see out there. a lot of the training and prediction are going to be done on those chips. >> which gets to big tech, which gets to nvidia, which is up. it was up yesterday as well. but this -- i don't know if it's a nascent concern, jim. >> jensen discussed it. >> you're going to start hearing that alphabet and amazon are designing their own chips in some way to replace part of the nvidia ecosystem or not? >> let's go over what jensen huang said to me. he said, listen, it's terrific that we're developing it, and we're working with them to develop it. one of the things we have to separate. amazon web services is very different than actual amazon, and amazon web services is truly built on nvidia. away from that, you have a lot

of good stuff that amazon is doing. web services is nvidia. jensen is not -- you know, he always says, i come in peace. he said to me, i hope they do a good job. they're my customer, and we'll help them in any way we can. you can't get the chips you want from amazon. this is in many ways a defensive move. >> nvidia, not -- >> nvidia's out. they're, like, this blackwell's already sold through that they're coming out with september. >> they haven't even come out with it yet. they've got orders for blackwell. >> let's just understand that a lot of this is trying to help people who cannot get enough. if we had michael dell on right now, do you think michael dell would say, listen, we're doing pretty well, we got a lot of nvidia. whoever gets the nvidia wins, but there's not enough nvidia. >> it continues to be -- right, there are simply the benefits to having the orders, having the ability to have the orders and have that matter. >> why would jensen say he had no comment? why did he say, listen, we're trying to help them? it's not because he doesn't want

anyone angry at him. he has an amazing relationship with zuckerberg, and zuckerberg wants all the chips he can get. one of the things that jensen said to me was that zuckerberg would buy everything. amazon would buy everything. >> right. so, you don't question the continued demand for nvidia's product, and i come back yesterday, when we had a discussion about it, the 28 multiple on calendar year 25 earnings. >> it's -- >> you're talking about -- >> it's just not an expensive stock. >> you're talking about them not being able to meet demand at this point, one would anticipate the growth rate is going to be pretty significant. >> it will be. this is selling, as of right now, it's at 26 times 2026 numbers. >> yeah, yeah. >> i mean, procter & gamble is more expensive. this is a technological marvel. and you know, i just don't understand how people value it so inexpensively, and yet all i hear about is how kpexpensive i is. it's a bubble, it's a bubble, it's a bubble.

enough with the bubble. can we go to carl? >> let's do that. carl's in colorado. he gives us a sneak peek of "cities and success: denver and boulder." premiers tonight. >> david, you know, jim is on the hunt for some optimism today. we should remember that the reason prices are so sticky in this country is because a lot of major metro areas are growing above trend. tonight, we're going to take a look at that in denver and boulder with "cities of success." we'll talk about it after the break. trading at schwab is now powered by ameritrade, unlocking the power of thinkorswim, 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. (sirens) [due at target in 5!]

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hey, welcome back to "squawk on the street." we're in boulder, colorado, this morning ahead of our series, the latest in our series tonight, "cities of success: denver and boulder." jim and david, i heard you guys talking about, it's an appropriate week to be doing this show tonight, because a lot of worry about inflation in the markets, but a lot of that is the result of economic growth. i see williams is out today calling for 2% full-year gdp, and that means a lot of american

cities are growing. so, we take a look at some of the policy decisions that have gone into play in bringing big employers to town. historically, i'm sure you guys know, denver and boulder have been about old line industries, telecom and energy. it's much more now about quantum computing and life sciences and certainly aerospace. 191 companies here in the aerospace industry. some of them literally working on building gas stations for satellites in space. now, in order to do all that, you need a labor pool that is mature and ready to hire, and that's something we talked with governor jared about. take a listen >> many employers looking at workforce. colorado shines. great workforce. people want to move here from other places, but we also have a great preexisting workforce. both. number one. great, low taxes, positive regulatory environment. great quality of life. we're making progress on housing, but it may already be

less expensive than some of the other markets you're in. if you're in new york, new jersey, california. we're going to be more competitive, and we're doubling down on that. >> they definitely are working on housing, guys. they need a lot of affordable housing. right now, they're offering incentives to various developers. they've got as much housing under construction, guys, as los angeles, which has five times the population. the governor likes to talk about property taxes, says they're 48th lowest in the country. jim, just as one example, remember the other day when you took your belt off on the show? >> sure. >> so, i was -- i was speaking at the university yesterday, and a viewer approached me, literally moved to boulder to start an apparel company that does make leather belts. so, i have this for you. i'm going to bring it back. they want david's belt size as well. i just thought that sort of crystallized exactly what we're talking about. >> it really does. i also think -- i think that the

kind of people would be drawn to working on that and then right behind you are some beautiful mountains, and you're done at 4:00, and you go climb one of those mountains, which is just a total rush, and we can't do that here. i think the people who are creative and drawn, these days, to really interesting things like to go hiking or skiing at 5:00. and i think it's really one of the great things they offer there. >> yeah. it's interesting. we do a bit on vc funding. a lot of vc has moved into the area. and they do say that, you're right, 20 years ago, we would have moved our start-up here because we like the lifestyle. we like the 300 days of sunshine. now, it's really about the fact that the labor is first. the talent pool is here. and you have the added benefit of having these things -- these mountains behind you, and the work from home, of course, remote work phenomenon has just accelerated that. but it's almost the inverse of what was classically the story is that you move here for

lifestyle. now, you're moving here for productivity. >> yeah. can you find a place to live? is that becoming more difficult? i'm sure that's part of your coverage as well. >> yeah. diana does a great piece on how quickly you can get affordable units built in a town with faster permitting and developer incentives, but that's really the key challenge. we take a look at not only the housing challenge but the migrant challenge. 40,000 migrants have moved here. that's the highest per capita in the country for a major metro, so we try to look at both sides tonight. >> well, carl, one of the things i'm intrigued by is that there are companies that are headquartered in california, but their whole workforce is where you are. >> that is true. that is why a lot of the entrepreneurs here are thinking in terms of a new silicon valley. i think it's senator hickenlooper says it's not dog-eat-dog here when it comes to start-ups and tech.

it's more like hunting like wolves in packs. trying to make the ecosystem work for you, just as much as you're working for your own individual firm. >> i love it. >> yeah. >> just fantastic. >> carl, looking forward to it, of course. know we'll hear more from you during the course of the day. that's a nice shot too. >> yeah, i love that shot. >> "cities of success" tonight, premiers at 10:00. coming up right here, jim is going to have a "mad dash" for us. we're going to count you down to an opening bell that is ten minutes from now. here's another look at futures. we got a lot more for you. "squawk on the street" is right back. investment professionals know the importance of keeping their clients on track. sometimes they need help cutting through the noise,

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okay, it is time for a "mad dash." we've got seven minutes before we get to an opening bell. what do you got? >> constellation brands, stz, this morning reports numbers that i have been waiting for, frankly. we're talking about some depletion numbers, which is how you really measure whether a company is doing well. modelo especial, 14% growth. pacifo, up 22%. great cash flow. this stock has historically failed almost every single time when they report their number. it opens up and goes down. i don't know if that's going to

happen this time. >> the family and the control or not the control. >> they bought out the family. >> this thing comes around, it's like people want to make it a takeover target. i don't know who the buyer is. >> antitrust would never. if irobot can't get a bid. they got corona from the justice department. >> it helped create the success of this company, the forced divestiture from anheuser-busch. >> it was the greatest giveaway in company history, but they had to give it to somebody. this was a number that was aided by a backlash against bud light. >> yes. >> which was the biggest beer. >> modelo. >> number one. and the modelo numbers are extraordinary, and don't forget, if you sell it right now, send me an invitation to your funeral, because cinco de mayo is coming up. i made my month at bar san miguel on a beautiful day. >> i miss bar san miguel. >> i had to sell it.

you can't own a liquor brand and also own a restaurant in this country >> look who you have on to be the. bill newlands. >> yeah, because this is all self-promotional. >> it's all -- it's all synergy. >> david, there are people that i have on that are going to blow this network away, and there are people who, really -- now, you won't believe who i've got coming. >> wow, okay. >> i'm booking myself. >> thank you for that. but you think -- you don't think this is enough? you think it's got more to go. >> i do think it's got more to go. it's been stalled. you know why? because elliott has a board seat. >> oh, yeah, elliott does. that's right. >> elliott's established a level of discipline that is just blowout. i'm giving no credit to cgc. no credit to cannabis whatsoever, even though people are telling me it's a possibility of i have a guy who last night is selling lsd. lsd, cannabis, i mean, timothy leary, where areyou? >> yeah, where are you timothy leary? we got an opening bell four and a half minutes from now. by the way, you can catch us any time and anywhere. t see owkand follow the "squa

onhetrt:pening bell" podcast. we're back right after this.

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well, as our viewers may know, a lot has been made of late of the moves in the magnificent seven stocks. remember good old f.a.n.g., though? remember that one? apple is the only member of the group. i don't know what he's doing here. >> this is f.a.n.g. this is a card game of f.a.n.g. these are all positive pieces. >> the remainder -- >> all double -- did you see that, jim? all double-digit gains led by meta, of course, which is up more than 45%. >> apple is down for the year. but these are pieces that defend f.a.n.g. right here. it is a full house. incredible. or if you're playing rummikub, this is a run of the house. >> are you going back to f.a.n.g. now, away from the magnificent seven? >> it doesn't matter. >> are you just all about nvidia and nothing else? >> this is why i love nvidia. why i love amazon by andy jassy. why i love meta. why i love microsoft. this is why i love alphabet. this is why i love apple. right now, this morning, because

the street wants these stocks -- they can't have this bull market end, david. the street won't let it end. >> people didn't catch that. that was funny. by andy jassy. that was andy jassy's amazon letter. >> just a little jibe. >> here's the opening bell. more green. here at the big board, computing company ionq. over at the nasdaq, solarbank, an energy operator and developer. >> we need more listings. where do i want to go? let's have a little negativity and trying to figure out exactly why it's so bad is carmax, kmx. they failed to deliver, and a lot of what carmax, a big miss in how much money they spent to get used vehicles, and i'm trying to figure out how this factors in with possible cpi. carmax down usually means you're

making less money in used cars, which means that used cars can be down in price, which means the cpi might be too hot yesterday and it might get cooler. as professor segal said this morning, we should care about next cpi, not this one. >> we're already moving on from yesterday? >> we have moved on. we're moving on. >> okay. >> let's talk about last night's games. >> is the equity market going to move on as well? >> the equity market is concerned that we have been up so much this year already. i think people feel, come on, it's due for a break. i come back and say, the banks go first. jamie dimon will speak first. he will talk about how rates should be higher. that's going to cast a negative pall. bank of america will be positive. no one will care next week. wells fargo, i think charlie scharf will tell a darn good story, but people think he has commercial real estate problems. au contraire, mon frere.

>> not with charlie. i don't believe you have an interview scheduled with him, do you? >> david, i'm a master of disguise. >> you are, but i don't believe it. there's nothing coming on that one. that said, i'm curious to see what you have to say about wells. i'm also curious to say what the earnings reports look like. when it comes to capital markets activity, there is a story emerging that some of the banks are trying to reclaim territory lost to private credit by coming in and undercutting on price. >> jonathan gray at the dinner last night? >> jonathan gray. >> was he great at the dinner last night with the president? >> i don't know, was he? >> i saw john gray. i saw judy marx from otis, the fed chief. >> john gray of blackstone, the president. >> that last -- i'm upgrading those stocks that anyone that was at that dinner. i'm taking the stock higher. >> my question was, are you --

we know m&a activity has still been relatively -- >> you heard jassy if irobot doesn't get done. >> fixed income, currency and commodities, what are our expectations? >> just okay. >> the lending business, perhaps a bit of a tick. ipos, not much. >> m&a, not much. >> we're talking a lot more here goldman and to a lesser extent morgan and some of the smaller companies that really rely on m&a. >> why did they not like that j jef jeffries quarter? >> you can go on and on. >> i just think these -- the multiples have gone up, but they're still low. jpmorgan at 12, that's not an expensive stock. >> best-performing big bank this year, though. >> i just -- you know why i mention it? jamie and judy were at the dinner last night. >> who was at the dinner? >> jamie and judy. >> that's jpmorgan. >> this was the state department with japan and this was a list

of who's who and who's not. larry fink was there. i'm saying all those companies deserve a rerating, because they're obviously in the room. there you go. tim cook was there. >> there's larry fink. >> larry fink was there. >> right. >> will you look at this? >> reporting numbers tomorrow as well. >> there's judy and jamie. >> masa was on these shores. >> there's bezos. >> that's quite a showing. >> oh, yeah. great showing. >> who's that? >> is that brad? this thing's amazing. you got to take all these stocks up, david. >> look. look who it is. it's the chair. >> that's jay and alyssa. fantastic. >> everybody's looking so sharp. >> we don't have to keep running it now. >> where's sanjay? >> larry had to walk in alone. >> larry's the best. >> where's sanjay and his wife, who are dynamite? i would have put him in that

list. marvin christian is up a lot. come on, let's go with the hitters. >> you got anything else to talk about, stock-wise? >> i was so good on that. >> you were great. apple, meta, alphabet, microsoft are all up. >> you bet. meta -- >> nvidia. >> okay, man, i got a migraine. that's killer. meta, another one. they're saying, lay, look out. they're adoption their own chips. meta wants everything that jensen has, so yes, they have to develop their own chips. gosh darn it. >> uh-huh. >> i'm working on a new hack here about microsoft. i'm working on that too. i got a lot of stuff, david. >> really? you got a lot of stuff? >> man, we're just beginning. med tech. i see a lot of good news. visa and mastercard. anyone frpever say a bad word at those two? warner bros. discovery, positive. >> let me see that. that's jessica reef. look at that. >> erlich.

you're welcome. >> yesterday, as were many of the companies that have heavy debt loads, warner bros. discovery shares were down. today, they're rebounding a bit to the tune of 2%. >> did you see this disney report? >> there's algorithms out there that any times rates move appreciably higher, it's sell. all high leverage companies. >> you're right. explain it to the people outside. what's happened is there really is a program, which just says if there's an elevated debt, certain number of terms, those stocks should be sold. >> we also need to sometimes remember that the machines, to a certain extent, run this market. when i say that, i'm not talking about -- i'm talking about the algorithms that are run by the giant complexes such as de shaw, renaissance, citadel -- >> it's why on "mad money," i say, please don't trade, people. you're up against these people. >> we don't -- again, we don't

come back to it that often. they are such a large percentage of the overall volume. >> gigantic. that's why you can stay away and just try to evaluate good companies for the long-term, and periodically, there will be piece pieces like the nike upgrade this morning. what you want to do is be away from the beaten track if you're the person at home, find which one of these stocks is unusual and the machines automatically say sell, but maybe they shouldn't be sold. >> you've got rocket scientists, literally, who program and spend many, many hours coming up with the algorithms. >> you're the only guy who talks about it. you're the only guy who talks about it. you can't beat these people. >> link things to other things in the market so say, if this happens, that happens, that happens, do this. >> thank heravens that you're saying it. >> always worth mentioning as we have a nasdaq that is up 4.1%. i don't know, jim.

are we just going to sort of trade around here? >> there will be something -- i don't want to say something that is -- you know, i think that a lot of people in the end of the day, yesterday, there was a move down. second leg down, and it coincided with stories about u.s. intelligence saying there would be a -- an attack on israel from iran. that's what -- >> saw that. >> that's what moved us down in the late afternoon. >> you surprised, by the way, that the markets overall have just shrugged off the level of hostility in general? i mean, in terms of ukraine, which continues to be an all-out war. >> yeah, and it looks like -- >> not to mention what's going on in the middle east. >> if this was 1943, we would say that ukraine is losing, not unlike what was happening in russia in '43. i do think, david, that there's a war premium to oil, and that's -- that seems to be the only place that really is -- >> that it shows up. >> that impacts the stock market. is the market callous or just saying, look, what does that have to do with the price turnings ratio of bristol myers?

>> not much. i got paramount. you know, jim, it's funny. i know paramount is a small -- relatively small company. the amount of interest in it is incredible, i have to tell you. there's not a day that doesn't go by that i don't get a number of phone calls from people who i haven't heard from in a little while who want to know what's going on. >> my great friend, jim stewart, has a book about it, and i keep saying, i want more -- >> let me give you a quick faber report. it is interesting. we are in that 30-day exclusive period. it will expire in early may in which david ellison, along with his partners at the private equity firm, red bird, are negotiating a transaction under which, as i've said any number of times, but is worth coming back to, that would involve boboth buying national amusements and shari redstone would sell it.

they've already agreed, is my understanding, to a price there. that was done months ago. still subject to due diligence. but they've agreed. the key, though, is the negotiations between this buying group and paramount itself, and the special committee, of course, for the board of directors. by the way, the big story that julia's been covering, for example, is the fact that four directors on paramount's board are going to step aside at the annual meeting. what i'm going to come back to, jim, is the deal itself, because you've already had a number of shareholders coming out, saying, wait a second, you're going to dilute us, pay a premium for shari's stock, and what do we get? you might imagine there's some frustration in the ellison camp in the sense of, they can't really explain their deal. they don't really have that deal fully in place. but i can give you some sense, at least, based on any number of conversations i have had with people close to and familiar with their thinking as to what they're talking about. first of all, you still need to negotiate an exchange ratio by

which paramount would essentially buy sky dance. that is part of this deal. it's not a one-time deal where they just buy control of national amusements. they've linked the two. national amusements, got to buy that. you also need to get a special committee that agrees that you can merge sky dance into paramount. you need paramount to come up with an exchange ratio. that's being negotiated. they're narrowing that range. and in fact, next week, for the first time, ellison's group, the ellison redbird group, is going to begin conducting due diligence at paramount. they are having meetings with management, and that process is beginning. so, they're deep into this. they haven't yet agreed to, though, an exchange ratio, and as i have reported a number of times, beyond the equity that would be exchanged for skydance, you would also have an additional equity issuance by paramount for which redbird, ellison, larry ellison, kkr,

which owns some skydance, would step up and buy more equity. that would be used, in part, to delever and do a number of other things. the plan on the part of ellison is to radically restructure paramount, massively cut costs in terms of rationalizations, and get the stock to, frankly, they believe, what could be multiples of the current press. that's their hope and their plan. that, by the way, is what shari redstone has signed off on right now, despite the fact that from what i've heard, there may have been a couple opportunities she had to sell national amusements and only national amusements at a higher price than she has agreed to with ellison, because she believes in this plan. she would remain a shareholder, by the way, in the new pro forma company, holding on to her common, her non-voting stock. will it all happen? what are the synergies

available? they aren't certain, but they have a good deal of confidence that they can reduce costs, delever, and essentially restructure paramount in a way, by the way, that would have reverberations far beyond paramount itself, because we talk so often about streaming and direct to consumer, whether it's netflix or disney or peacock or warner brothers discover's max. it will be interesting if this deal does happen to see what comes out of it. >> i'm listening to andy jassy today, and he's talking about wanting to have all the sports programming he can get, and i look at this incredibly levered and also warner brothers companies, and i just think, like, did they just -- these companies have so much debt. >> they have so much debt. >> how can they compete in the new world where the only thing that's watched on really tv is live sports? >> that's the key that we come back to. bob iger says, we're going to be solid number two to netflix. that is the hope for disney plus. the question still is, all right, warner bros. discovery and max, can you make it a got of it and make it a strongly

profitable business that's growing? and you get to the likes of paramount plus and peacock, and there are real questions in terms of the long-term viability of the products if there isn't some sort of consolidation or rationalization. shari redstone seems enthusiastic. will it get to the finish line? that is a key question. by the way, this semi-offering from apollo of $26 billion, which was simply one letter, didn't do anything to help the special committee, which is going to be under a lot of pressure. it's going to want to establish a record in terms of decision making but there hasn't been any more delineation is my understanding. >> the thing we're looking at right now, the common stock, does that have anything to do with the things you're talking about? >> it does, because there will be dilution, but that will be taken on eventually, because you'll have a far stronger company. you'll have a merger of skydance and paramount studios. you'll have a completely different approach that perhaps current management simply is

unable to do right now, given the constraints they're under. you will have a rationalization in some way of the streaming service, perhaps there will be asset sales of some significance. jim, you know -- >> there is a ceo by the name of bob bakish. i'm not hearing his name at all. >> no, no, no. if this plan takes place, david ellison will be the ceo of this company. >> of the company that's not this. >> the pro forma company of the merger of paramount and skydance, and jeff shell, our old boss, very much involved in this process as well. he's working with redbird, and he will have a significant position at the company in terms of helping them reduce costs and do a lot of different things in realizing what they believe are very significant synergies for what is essentially almost a recapitalization of paramount. yeah, ellison, shell, and then larry ellison, don't forget, as well, will be involved, because he will be a very large shareholder. >> if larry ellison is involved, i'm a buyer.

end of story. >> that's paramount for today. i'll send it back to you. wrap up whatever it is you want to hit before we take a quick break. >> well, look, i think that we have to watch the group that was hurt so badly yesterday, which was home builders. they were wrecked. you take a look at pulte home, which was just crushed yesterday. it lost like a month's worth of gains, and it's making a nascent comeback, not a lot of volume. watch the home builders. if they don't stay up, david, then people will think the cpi was not real. i mean, the ppi was not real. the cpi was. let's watch that group. that's the most important group right now. >> finally, back to m&a. not paramount. i did note jassy's comments to andrew sorkin around the irobot transaction. >> isn't that interesting? >> i thought they were really interesting in terms of what he was talking about. >> i'm so interested in that. >> conversations not just in the eu but also our own ftc. a small acquisition of the make of the roomba. take a listen to what jassy had

to say. >> it's a really kind of a sad story. it's a great entrepreneurship story where you have this, you know, this american company that invented this product, invented the category, built a business that was almost a billion dollars in revenue, and whenever you build a good business, you end up with company and competition, so they attracted these two very large chinese companies as competitors, and they needed scale, because scale lets you buy components at the right price and invest in r&d. they merged with amazon, and the european commission blocks it because they worry that we're going to feature our vacuum cleaner, you know, their roomba, versus others, which is not our model, because we make at least as much money selling third-party items as our own. >> he went on to basically say they're operating outside the law. >> i had shark ninja on, because i said, this is the justice department play. justice department wrecked irobot. and it was like, you know -- now it's the flip side of what jassy's talking about.

he's talking about the policy implications. i'm trying to make money with shark ninja, but that was the winner. what the justice department did was gave this chinese company the run of the joint. is that what we want? >> no. >> backfire. >> no. it's not. >> justice department is so out of touch with the reality of the business world. >> it was the ftc. >> was it ftc? >> i believe it was. >> i've got to tell you. shark ninja is such a winner off this. you should go buy it. the chinese still own 51% of it. it's a winner. and you can get their stuff at costco for a fraction of the cost. >> if you take nothing else away from this incredible hour, shark ninja is a winner. >> there you go. >> we'll give you a quick bond report before we head to a break. treasurys were the story yesterday, including that auction that -- what was it? a "d"? is that what santelli gave it? where are yields right now? you can see the ten-year down a bit. 4.542%. and the two-year note, still pushing near 5%. but down a bit on the day at

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i haven't checked in on trump media and tech. it's had a rough debut since de-spaccing. you could have bought the spac. dwac at prices far below this and you would be up enormously. well down from the early days. that doesn't mean the former president is not going to get those additional 40 million shares. he will. because every day that goes by that it stays -- it's already basically done. it just has to average 17.50 for any 20-day trading period it will do in the first 20 trading days. we'll keep an eye on it. we're back with stop trading from jim. to sharpen their skills with tailored education. get an expanding library filled with new online videos,

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plus ask how to get up to an $800 prepaid card. don't wait- call today. okay. let's get to stop trading as we wrap up this exciting hour. >> the r.o.t., neither -- not r.o.t. from north by northwest but johnson & johnson has broken 150 and this is a premiere company with a 3% yield.

it sells at 14 times earnings. that's a low multiple. this is what you see when you get away from the magnificent seven or you get away from the love the industrials. sometimes i wonder whether this isn't finally coming to roost at medicare negotiating prices. >> they've had a number of headwinds and you talk about talc and the potential litigation there. i don't have any idea what a 20-year looks like. the great names and they don't perform particularly well sometimes. take a look. what is that? that's not bad. >> it's not bad. >> i want to see that upturn continue because when you buy great companies in our country historically you've done well. j&j, they do a lot of good things and the stock has failed to perform in this period. >> all right. i know one of your guests tonight. what else? >> i have marvel, right up there with broadcom, involved with the data center and nvidia, partner of nvidia. docusign. i wanted to ask about that, the

non-lbo takeover of docusign. and then constellation which i wish, i'm going to push for them, it's modelo, corona and pacificco, lowest end beer in mexico but you can charge the most for it. >> they like the long neck. >> it's done. now it's -- >> how about you get out of the messcal business. >> my wife owns. i do not. if you want to take on my wife, forget about it. almost slipped there. >> coming up -- see you later, by the way. coming up we'll have more from carl in across ahead of tonight's cities in success premier. an exclusive with imf director what she sees as a challenging global environment. keep it here. ♪ upbeat music

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good thursday morning. welcome to another hour of "squawk on the street." i'm sara eisen here with david faber, live at post nine of the new york stock exchange, carl is with us from boulder, across, this hour ahead of tonight's premier of "cities of success, denver and boulder." we'll get to carl and hear more about it in a moment. take a look at stocks this morning after yesterday's inflation related selloff. we're unchanged on the s&p 500 this morning. we were higher most of the morning. we've gone into negative territory. the dow down 91 points. the nasdaq remains higher by 0.3% as technology stocks do outperform. take a look at treasuries. that's been the center of the action lately. big selloff leading yields higher. that was the story off yesterday's cpi today, as ppi we'll talk about offering relief. the 10-year yield moves south but remains above 4.56% after a

weak auction yesterday. 30 minutes into the trading session here are three movers we're watching. carmax shares taking a hit after missing earnings estimates on the top and bottom line. the ceo saying a weak consumer and higher interest rates are hurting their sales for the quarter. robinhood shares under pressure getting downgraded to sell at citigroup saying the stock's strong performance is disconnected from the fundamental outlook. shares are up almost 40% so far this year. look at shares of doordash a bump on an upgrade. upgrades the stock to buy, raises the price target to $164 from $118 saying never bet against the american consumer's willingness to spend. david, we've got a lot to talk about today. >> okay. well, you go ahead. you talk. i had an active hour with jim, so i'm going to stand by and listen. in all seriousness, ppi, love to get your thoughts on that. >> before we get into ppi, he guard who wrapped up her news

conference. the ecb meeting happening, leaving rates unchanged. i would say hinting a rate cut is coming and we've got an interesting divergence now from the fed and here's how ecb president christine lagarde characterizes european inflation versus u.s. inflation. >> i don't think that we can, you know, draw conclusions on -- you know, based on an assumption that the two inflations are the same. they are not the same. the xeconomies are into the sam. the fiscal policies are different. we have to focus on what we have jurisdiction for, which is the euro area, taking into account what happens in the rest of the world, but not assuming that what happens in the euro area will be the mirror of what happens in the united states. >> it's relevant she's talking about this in light of yesterday's very strong or hotter cpi report. europe has not seen that hook

up. there's a great chart to look at for the major economies as to what's happening with inflation right now. all the way at the bottom that's china. we've got news overnight 00.1% cpi. they're in deflation. the only one of the major lines hooking back up is the u.s. and that's the darker blue one that you can see with a little curve up. europe has come down. uk has come down. they haven't really seen the flare-up that we've a seen in this country. just to put it in context, the last european inflation number their cpi was about 2.4%. they're running lower than we are and now their expectations that the ecb will cut rates. >> we all measure it thesame way. >> no. >> probably a different conversation, but jim was questioning some of the calculations and what is taken into account and not. taken into account the way it should be. >> it's fair to do that because even in the ppi, the wholesale look today the auto insurance

number didn't look like the auto insurance number in the cpi. the pce, which we get at the end of the month is tracking a full point lower than the cpi. the methodology is a little bit in question here. we take it all, you know, sort of holistically. there's the ppi index, and it gave the market a bit of a sigh of relief after yesterday's cpi because it came in below consensus. core, these are still elevated numbers, but they're better. 0.2%, lower than the expectation, 2.1% increase from the year before. we're not into the lower levels we saw at the end of last year. services where all the inflation is in the pipeline here because goods deflation. services inflation. and some of it are weird quirks like the portfolio management services brokerages because those are up because the stock prices are up. that feeds into the service price. we can scrutinize the methodology, but no matter how you look at it, we are above

where the fed wants to be and the progress has stalled and that's something that increasingly economists are taking into account. rbc is one of the numerous wall street firms yesterday that took down the number of cuts they expect in 2024. they went from 3 to 1. here's what they look at. the super core. i mentioned this yesterday. this is services inflation exhousing. it's what the fed had has looked at to see if whether there's going to be some sort of wage price spiral. higher wages translate into we're paying higher for the services. three and six month annualized data and these are high numbers. 8%. those are troubling. that's why they changed their forecast. goldman sachs, jan hatzius, has been all over the place. so has the bond market in rate cut expectations. they go to two instead of five. barclays, there's jan. he said the jump in car

insurance will not flow. however the strength in car repair and apparel prices, we're pushing back our forecast of the timing of the first rate cut from june to july. we continue to expect cuts at a quarterly pace after that, which now implies two cuts in 2024 in july and november. some people are going to one. here's barclays. likely eroding the fomc's confidence that inflation is moving sustainably towards 2%. we adjust our policy rate call. no longer think the fomc will be comfortable initiating every other meeting cuts in june. we expect only one in september. this is why we're kind of all over the place now wondering whether we will even get a cut in 2024. >> yeah. that showed up in the performance of the bond market and the equity markets yesterday, of course. what's it meant for currencies? >> huge moves. we have to talk about the dollar/yen. overnight we got to 153. that is a strong dollar and a weak yen. it is a level we have not seen

since 1990. you know who is most upset about the fact that this inflation is hooking back up? the japanese and chinese trying to manage their currency. >> japanese visiting right now. of ourse. >> yes. right. some people were saying in the notes last night, it would be awkward if they had to intervene in the currency market as the -- >> right. >> the prime minister here in the u.s. great time to go to japan. i had a layover there on the way to china. >> buy anything? >> just sushi. >> it was reasonable? >> it was reasonable. >> the souvenir store i got my kids pick ka chews cheap. >> airport sushi is good sushi. >> comes from the tokyo fish market. it's incredible. skp and cheap. watch out for intervention. currencies are going crazy. a number of firms on the street pairing back as we've been talking about the rate cuts they're expecting this year. what does that mean for the stock market? research strategist sam stovall has an s&p target of 5250.

can the market rally if we don't get rate cuts, snam. >> sam? >> i think so. i think one of the reasons the 10-year yield is creeping higher, the fed is going to take its time in a sense be slower to lower interest rates is because the economy is doing fairly well and so as a result, i think there is after we get through this much anticipated correction, that history says is overdue, i think we do end up being higher by year end. >> so built onthe strength of earnings and the economy? is that good enough? has that already been factored in. >> i think we're expecting to see about a 9.1% gain in earnings this year, about almost 14% gain in earnings next year. i think the real question is, how deep will a decline actually be? our expectation is that we could see a decline anywhere from 8 to

11% and that would be fairly consistent with history. it would also imply that we reset the dials and that we have a better chance of moving higher as the year ends. i think investors, if they want to take away one thing from my note that will be coming out is essentially don't let your emotions become your portfolio's worst enemy. >> so you expect a garden variety correction as you say, and you would be a buyer on that. in what group? where is the leadership going to come from? >> well, the leadership or those groups that are likely to hold up the best are your traditional consumer staples, health care, utility kind of stocks in particular, the three best performing groups during all corrections going back to 1990, were gold, were electric utilities, and also household products. companies like new month corporation, next era energy and procter & gamble would be

companies that would hold up during the decline. we rotate back into those beaten up the most. i think we could end up seeing good returns come from communication services, financials, and technology by year end. >> okay. sam, thanks for the playbook. >> all right, sara. also want to mention there's a 30-year auction of treasuries today which will be closely watched after yesterday's 10-year didn't see quite the demand that was expected. >> no. >> not after richard fisher with us yesterday discussed that as a fear as we move through this year into next as well. >> high debt loads weighing on demand for treasuries. >> yeah. huge issuance. back to the fall where i was asking you about it on a weekly basis. >> if we continue to get auctions like that. >> we can always look at the debt dynamics. they matter more when there are questions about the fed. when the fed cuts that takes precedence and there's plenty of demand.

>> over to carl quintanilla who joins us live from colorado. carl? >> you know, guys, i can't help but be struck by the conversation that you guys are laying at the desk and we've been having for weeks about the u.s. macro, and the things we're trying to look at tonight in our special "cities of success" profiling denver and boulder because denver and boulder offer examples of everything you talked about, the strength in the job market in this country, the change in migration trends to urban centers as remote work has become something we're going to be living with for the foreseeable future, and inflation, which is very much the byproduct of u.s. growth. if we're going to get 2% gdp this year you're going to see it in examples like denver and boulder, where by the way, denver is considered to be about 70,000 housing units short of the current population. the current population, not judging what's going to happen in the future, but that sort of leads you to the sort of super

core services shelter, inflation components that we're spending so much time wringing our hands about. we'll look at that tonight. look at some of the policy choices the cities have made to drive the success and handle some of the challenges that come along with growth which, of course, we all know by now is manifesting itself in pricing. look forward tonight. 10:00 p.m. eastern time, guys. >> carl, is it that businesses are moving into these cities? are they allowing people to still work remotely? >> i think it's both. the fortunate thing for entrepreneurs is they're not having to bring workers with them if they're going to relocate to denver because there's already a steady pool of ready-to-work people, but this was a similar dynamic we had in nashville. you get a big employer moving to a new city and they will take maybe a quarter of people from the prior city to the new one. the rest is going to be hired internally so to speak, so you're looking forcitis that

have a ready to -- just add water labor pool. denver and boulder would argue they have that. it's a challenge if you're going to be moving locations for your company. >> is there a state from which that area pulls the most? is it california? does it tend the west coast as opposed to the east? >> we were just talking about this off camera this morning, david. california is a huge draw in terms of inward migration. but you're also looking at a lot of towns in the midwest, that are smaller, where maybe graduates get out of college and they're looking for work and want a little more of a vibrant metro environment and denver is a natural candidate. i should mention denver's pitch, elevator pitch, is they're centrally located in the country. getting international travel, you might go to denver first before you go it other areas of the u.s. denver international airport, by the way, dia, is going to make a run at being the busiest airport in the country surpassing dallas and atlanta. i will be curious to see what

transportation metrics are for 2024. that's very much a real possibility. >> wow. that is surprising. i did not know that. carl, beautiful, those have a beautiful backdrop there and fresh air. we look forward to much more from you throughout the hour. >> the ultimate scene stealer as we say. >> absolutely. and you got it right as the sun is coming up. thank you. we'll see you in a bit. as weigh head to break our road map for the hour. amazon trading around all-time highs, getting closer to $2 trillion in market cap. ceo andy jassy out with his new letter to investors. we're going to discuss what's ahead for that stock from here. >> shares of nvidia one of only 15 stocks in the nasdaq 100 to go up in yesterday's selloff. a number of calls today on the stock. we're going to tell you where the street stands. the health of the global economy. exclusive with the imf chief kristalina georgieva talking inflation, growth and trade. big show still ahead. "squawk on the street" back after a quick break.

♪ i don't foresee us spinning it off. it's so tightly integrated into our prime offering. i think that sports, if you look

at the ratings of shows every year, sports occupies 90 plus percent the of the top ratings. with thursday night football, how many customers love that offering and come to it and how many prime subscriptions it drives and so, you know, thursday football has been a huge success for us. we have nascar coming, we will have six races in the middle of the year, soccer through uway fa and champions league. >> that was andy jassy speaking with andrew ross sorkin on "squawk box." and responding to a question of whether he would ever consider spinning off amazon prime video, for example. interesting comments there. our next guest says amazon is his top mega cap pick. gill laurie, a software analyst at d.a. davidson and has a buy rating, target 235. that is the highest on the street. gill, give me your take on the letter. i assume, and i hope you watched the interview as well, anything stand out to you from either one of them? >> well, i think the letter goes

through great detail about amazon as approach, the fundamental based approach. the reason it's important at this point in time, is that that's how they're approaching generative ai. they're not trying to provide a wholistic solution or sim gu lar internally built solution. they want to provide all the building blocks, from chips to models to middle ware to applications and allow their customers to take different pieces that they need in order to create the solutions that they want to use. this is a very important approach because it positions them to catch up to microsoft azure. microsoft is getting all the credit for delivering ai applications and services. amazon is getting very little credit, and in spite of the fact that aws is the bigger business and they're doing a lot to catch up. >> so fair to say your optimism is centered largely on what you

believe is what will be the success of aws? >> yes. absolutely. this is the most important business. it's reaccelerating this year. not just based on generative ai, which i think is a case, but also other types of tailwinds. enterprises have stabilized in terms of trying to cut down costs. the acquisition of vm ware by broadcom is actually made the market a lot better because it's causing their customers to reconsider what they have on premise and what their shipping to the cloud. they have a variety of tailwinds at the aws business that should play out this year, while the retail business is going to do well, increase margins, but the aws business is going to really be the driver. >> he also talked about cost cutting in the letter a bit and said the company remains committed to it, said that they challenged every closely held belief in our fulfillment network, reevaluated every part

and found several areas where he says we believe we can lower costs further while also delivering faster for customers. how much room is there left to cut? >> well, there's always -- amazon taught us anything, is that there's always more room. they've been able to reduce the costs of fulfillment and delivery and the whole supply chain every year, and they're going to continue to do that which extends their lead in the retail business. the other thing that's important there is visibility into margins. in the past, amazon hasn't been consistent in delivering margins especially in the retail business and the fact that they're talking about continuing cost cuts, tells us that they're at the very least willing to sustain these margins while at the same time aws is growing at higher margins. >> finally, to your price target, given we're talking about the stock, 235 is 18.2 times calendar year 25 ebitda

numbers. why is that an appropriate multiple in your opinion, given it certainly is at the higher end of the range in which amazon is trading? >> well, that's right. they have an accelerating business. i would just crystallize what's going on right now and step back and say, if you choose between $100 billion hardware cyclical business or a $100 billion software leading software business, which one would you pay for? right now nvidia's market cap is higher than all of amazon. i would say that i would rather own the big leading software business, and have the retail subscription advertising business thrown in for free. >> gill, thank you. gill luria. >> it's amazon, apple, nvidia and broadcom helping the nasdaq out perform right now. after the break, some big wall street calls on the other mag seven names including a price

target increase for nvidia, plus an exclusive with the head of the imf, when she believes central banks around the world should begin cutting interest rates. we're back in 2 minutes.

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welcome back to "squawk on the street." we have a lot of analyst calls on the mag seven to keep an eye on including a big price target increase for, what else, nvidia. dominic chu has it all for us at hq. >> david, we'll start off with shares of nvidia right now. the world's most valuable computer chipmaker getting a target price increase at raymond james, up to $1100 a share. it was 850 before. they maintain the strongbuy rating citing things like more revenue momentum into 2025 driven by new products and the developing arms race if you will between big companies that will use high-ended ai and data center products, the so-called hyper scalers. analysts at goldman sachs are naming nvidia a top pick heading into the earnings season's report. next up you have shares of apple in focus due to a call out at jpmorgan which keeps its overweight rating on the iphone but cuts the price 210 from 215 and added sentiment looks like it's improving with hedge fund

investors despite deteriorating data points. next up the most valuable company in the world microsoft, the cloud computing business software and now ai giant is getting a big target price increase from morgan stanley, reiterates overweight rating and raises the target price to $520. it was 465 adding it's positioned for tech cloud and generative ai. meta platforms, analysts reiterate overweight rating on the company. they raised the target price to 600. it was 525. they added they see the upside momentum continuing, despite the strong run up in the stock and we'll end on shares of alphabet. the google and youtube parent company cloud computing company reiterated buy at goldman sachs citing optimism over new product services and partnerships recently unveiled at the google cloud next conference. now for more on some of those other top analyst calls of the day head over to cnbc.com/pro,

subscribers there have access to a lot more on each of those stories. i'll send things back to you. >> take a little and these analysts get bullish. dom chu. as we head to break, the top gainer on the s&p 500, that is nike. it is among the biggest gainers after a bank of america upgrades the stock from hold to buy, raises the price target to 113. we'll talk to that analyst next hour on money movers. carl back to you for a look at what's ahead. >> sara, ahead of our special "cities of success" we've talked about the boom in tech startups in this area. but all those new ventures will need venture capital. we'll talk about the wave of vc funding that has moved into denver and boulder when we're back in a moment.

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. ♪ welcome back to "squawk on the street." i'm bertha coombs with your cnbc news update. japan's prime minister is meeting with the top four congressional leader this morning ahead of a scheduled address at a joint session of congress. it comes one day after his government upgraded japan's security alliance with the united states and before a trilateral leader summit with the u.s. and philippines. a vietnamese court has sentenced a real estate tycoon to death. according to state media, committed the largest financial fraud case in the country's history taking out 2500 unlawful loans at a bank diverting the funds to shell companies resulting in $27 billion in

losses to the bank. the former interpreter for shohei ohtani is reportedly negotiating a guilty plea on federal charges in the u.s. ipy my zahara was fired after allegedly stealing millions of dollars from otani to cover gambling debts. sources tell "the new york times" the investigation into the interpreter is nearing a conclusion. sara, back to you. >> thank you. the imf this morning sticking with modest 3% growth outlook for the global economy, well below historical average and estimating output lost since 2020 is around $3.3 trillion. asking whether the 20s will be defined as turbulent, tepid or transformational. joining us now on this in a speech and a cnbc exclusive, kristalina georgieva. it's great to see you, managing director. thank you. >> great to see you, sara. thank you. >> so farce global growth just a

snapshot of where we are right now, it sounds like you guys think that things are looking up from where we were a few months ago? how does it look? >> it looks better than it did then, marginally better, but better nonetheless. there are two drivers. one is a strong u.s. economy, two, some of the emerging markets that are surprising us on the upside. the news is inflation is going down, but it is not yet where we want it to be. >> that's just what i wanted to ask you about. inflation coming down. especially in the united states, how do you view the path from here? because it was looking really good until this year when now we've had three hot reports in a row. >> well, we need to continue to follow the data, and the data will tell the fed when it's time

to act. we have been steady on -- it was early when many were enthusiastically talking about cutting march, seven cuts this year, and, of course, what we are hoping for is that the fed would make the right choice, act if and when circumstances allow it. >> what does that mean? because i think what the discussion is, should they make an adjustment from 5.5%, which is historically pretty high and restrictive policy, to get in front of any weakness in the economy, or should they wait for more evidence that these high rates are really hurting the economy and slowing down inflation more? >> look, the fed is going to be watchful and it's not going to be in a hurry, but let's be more optimistic around the future

because u.s. is not affected by what is happening in other economies, pressure for increase of labor costs. this is mostly due to the fact that the labor supply in the u.s. has been quite strong, and also, the u.s. government is in a position to play somewhat bigger role in making sure the economy doesn't overheat. so in -- from where i stand, the fact that the u.s. economy is strong is good news for the u.s. and world economy, but if interest rates were to be prolonged at the high level, much more than we initially anticipated, that can create risks for financial stability for the rest of the world. why? because high interest rates, all

other things equal, are throwing cold water on economic activity and, two, because high interest rates means the united states is very attractive for financial, if the dollar is strong, flip side, currencies are depreciating. i can tell you that you're watching it we're watching it, and we remain on our projection that we would see by the end of the year the fed being in a position to take some action in a direction of bringing interest rates down. but again, don't hurry until the data tells you you can do it. >> right. which i think they would agree with. i mentioned the global picture earlier. you know we're starting to get a divergence in terms of timing of rate action. the ecb was out this morning. they're seeing lower inflation than the u.s. uk hasn't really seen the tick

up of inflation we've seen in the u.s. china is still battling deflation. i wonder what all of this means for the foreign exchange market and just global stability if we're starting to talk about these divergences. >> well, we see divergences in many aspects. we see it in the real economy. the united states is doing very well, but the eurozone not so well. as you know in the beginning of the year well, had three large economies, uk, germany, japan, falling for a short while in a technical recession. within advanced economies and emerging markets and the low income countries, there is now more visible divergence in economic fortunes and, of course, we see that also in the inflation front. some of the emerging markets that acted early to fight inflation, are already in a position to cut interests.

whereas, some are actually struggling as you said with the risk of deflation as it is the case in china, although our data do not yet confirm that deflation is a prominent and present in china. and we have to recognize for policymakers, it is really tough time. no more they can look at each other and say, oh, the fed is going this way, i'm just going to follow. in fact, we would see more of this divergent policy actions in the months to come. and rightly so. different conditions, different action. >> i am curious your view on china. you don't see outright, prominent deflation. i was just there. it's hard to get a sense of what's happening there on the ground, as they are trying to shift investment from real estate into advanced manufacturing. what's really happening in terms of growth in china? >> well, the chinese economy

does need to shift -- we will be recommending and continuing to do so to focus on domestic months and that means one, fix the property sector. they have taken some action, but in our view more is necessary, and why is this important? because for many chinese, their property ownership is their pension, it is their security, so when the price of real estate goes down, people spend less because they worry that they're losing that security. second, we are very keen to see more attention to social safety nets, so again, to boost consumer confidence and to see more domestic demand, and third, china does have some space to pursue the reforms of state-owned enterprises, bring

down local government debt, get more attention to the functioning of the markets generally market based economy, let market forces work harder for them. and if they do that, if they pursue reforms, they can actually boost output for the next couple years up to 18%. that would help china. it will also help china to sustain its role in asia as a source of growth. >> yeah. similar to what treasury secretary yellen said. >> yep. 1% growth in china translates into 0.3% in the rest of asia. but that growth has to be more demand driven, more consumption driven, and this is where we are engaging with china, recommending the direction to travel is this.

>> i also wanted to ask you about your work on ai. i think it's interesting you're starting to do studies on the impact ai is going have on jobs, which is something i think the economics community has been h hungry for. a study showed ai could affect 40% of jobs around the world, 60% in advanced economies. are you thinking about improving jobs, losing jobs, and how should governments be preparing for this? >> so what we would see is some jobs are going to be enhanced, more productive, some jobs will be redefined and some jobs will be gone. what governments need to do is to really focus on this world of artificial intelligence that is already on their footsteps. what we are recommending to our critics, one, make sure that you are -- your economy is ready by having digital infrastructure in place and accessible to

everyone. two,p invest in people, in skills, and make sure that people can easily and quickly be retrained like the danish model. and three, there has to be a regulatory environment to capture the benefits from the gains of artificial intelligence, but not fall into the risks it presents. there are significant risks, risks of misinformation, disinformation, misuse of artificial intelligence, also risks that we may be hit by increase in equality, translating into popular discontent unless we now act to be ready. as our analysis shows, it is a big impact on the labor market

that we have to be ready for. >> well, kristalina, we certainly appreciate you joining us to talk through the big picture themes you're watching ahead of next's imf world bank meetings at the atlantic council today. good to see you. >> thank you, sara. great to see you. >> kristalina georgieva, managing director of the imf. which now, you know, you turn to the imf, david, when everybody is starting to diverge on policies when currencies are going crazy. my takeaway, she says she thinks the fed will be ready by the end of the year, but is in no hur for cutting rates which would alleviate the stresses out there. >> is she better than any other economist? >> she has a more global view. the imf does a lot of good research. >> let's go back out to carl out west with a look at what's coming up. carl? >> david, from that macro discussion to trends we're seeing on the ground in cities like denver and boulder that explain some of the economic data we've been getting lately.

we'll talk about that when "squawk on the street" continues live this morning from boulder.

want to feel good, sort of feel the outdoors, take a look at carl quintanilla out west as he gets ready to debut the latest installment of "cities of success". >> hard to compete with the backdrop here, but the high-tech boom happening here in boulder is interesting. the sector supports almost 140,000 jobs in the denver metro area. it's up 37% in a decade according to the across office of economic development. and international trade we're d diving into the technology area and other areas powering boulder and denver in "cities of success." here's a sneak peek. ♪ >> tech is booming in denver boulder. attracting giants like google,

amazon, and salesforce. it's now one of the region's biggest economic drivers. an estimated 24,000 tech businesses call colorado home. about 73% of those right here in the mile high city, supporting almost 140,000 jobs in tech. up supporting. >> i think you'd be shocked as to how much funding is going into this ecosystem. >> boulder based venture capitalist former ceo and chairman of once publicly traded telecommunication zai recently started a venture capital firm with a focus on tech. >> you've called it boulder, one of the most vibrant communities on the face of the earth. >> yes. >> you don't think that's overstating it. >> no, not at all. >> he's not the only investor bullish on the region. over the last five years about $17 billion in vc funding has poured into the area. >> don't miss our prime time special tonight, "cities of

success: denver and boulder" on 10:00 p.m. eastern time right here on cnbc. david, i'm fascinated by -- we know denver was the capital of telecom for so long, they made this town to a large degree what it is. danica dan caruso started their own new generation of companies that aren't just telecom but funding quantum commuting, life sciences and biotech. it's interesting to see how that flowered out from the heyday in the late '90s. >> qwest, old u.s. west and liberty is still based there as well. carl, i know you have some roots in the area. i'm just curious from a personal reflection standpoint as to how much it may have changed given how deeply you take a look at things now? >> you know, obviously fly in and the sprawl just gets your

attention. the highway that connects denver and boulder is now basically stuffed with housing and businesses whereas before it really was just empty space. same story south of denver, between denver and castle rock on your way down to colorado springs. that kind of spread is the most obvious thing. but i would argue, you know, there was a big period where denver kind of had this self-conscious, self-image of a cow town, meaning if you succeeded here, eventually you would leave for l.a. or chicago or miami or new york. there's a growing sense now you can start a business, scale it and never leave because the talent pool is here and there's no incentive to graduate to something, quote, larger. i think from a self-image standpoint that's been a huge step forward for the city's image. >> in one of the tapes i think youshowed the justin's nut butter. some of the big food companies, for some reason, do a lot of m&a

in these smaller companies that are based in denver, colorado. for whatever reason it's become a haven of food startups. maybe it's all the farmers' markets out there. >> some of that. such a good point. hains celestial got part of its name from celestial seasonings. that's a boulder story. the consumer products and health and wellness element has added a lot. coach prime, we haven't really mentioned today, the estimated economic impact to boulder is $100 million just from the coach alone. that's one more thing they've got in their quiver. >> can't wait to see the entire program tonight, carl. great stuff. 10:00 p.m. tonight, "cities of success." another quick programming note as well. tomorrow morning we'll have a big interview with blackrock's

chairman and ceo larry fink as the company gets set to report before the bell. that will be 8:00 a.m. eastern. we'll be right back. 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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top of the market after bank of america upgrades the stock to buy, saying nike estimates finally look achievable. we'll speak to the analyst who made the call next hour on "money movers." tomorrow morning do not miss nike ceo john donahoe, a cnbc exclusive, 10:00 a.m. eastern right here. the company, david, is in paris unveiling new uniforms for its teams it's sponsoring at olympics and using this platform to showcase innovations when there are questions about the innovation wheel at that company. >> a good day tomorrow shaping up there. >> we do. >> we got a lot more live market coverage for you right after this.

good thursday morning. welcome to "money movers." i'm sara eisen with david faber today live on the floor of the new york stock exchange. wall street rethinking the timeline for the first fed rate cut. bmo's chief investment officer with us breaking down the market impact. >> we're live in boulder for cnbc's second installment of "cities of success." carl joins us for a look