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. here we go. check out the u.s. equities. the markets closed higher yesterday. this morning, futures are down. dow futures off 20 points. nasdaq indicated down by 30. you have the s&p futures off close to 10. the treasury yields we have been watching continue to be in the same range. ten-year yield at 4.63. two-year yield at 4.98. joe mentioned the breaking news at columbia university. protesters stormed the building which was coming hours after the leaders suspended students who refused to leave the encampment

when the 2:00 p.m. deadline came and went. we will see what happens. these are happening not necessarily at this level, but all over at more campuses yesterday. >> south florida. you know, if you are watching, it could be any university at this point. i'm not surprised to see it happening. crazy. everyone comes to these conclusions at the same time at every university. very strange. media news. something that is easier for us to understand, i guess. this is not easy. bob bakish is stepping down. me merger negotiations with s skydance continue. cbs president george cheeks and

showtime ceo chris mccarthy and paramount pictures chief brian robbins will be on the board. they reported 62 cents which beat estimates. we will talk more about the paramount news with rich greenfield later in the hour. to news about the parent company that nbc universal is prepared to pay $2.5 billion a year to air a package of nba games. warner's tnt has been paying $1.2 billion a year under the current deal, but failed to reach a new agreement with the nba before the negotiating window expired last week. the subscription prices for peacock are going up. increasing by $2. the option will cost $7.99 a month and ad-free is $13.99.

macy's is sending an ultimatum to corporate employees. come to the office two days a week or you could face termination. according to bloomberg, the company telling hybrid employees yesterday via email that the policy will go into effect on may 13th. it is giving workers a three-month grace period to move back to the new york city area. if they have not returned by then, they could face consequences, including termination. >> this is what bruce ratner said yesterday. the occupancy levels. you normally have 25% and now it is 12%. take a look at shares of trump media. they have been rising since the low of $22.80 hit on april 16th. the stock closing at $46.69. the company has been campaigning

against short sellers and making it difficult to loan to sellers. it may have decreased the number of shares. it may be possible a short squeeze is occurring which forces you to repurchase the shares. without that explanation, there really is none. >> probably not. it is not realistic to say it reflects poll numbers. i could make more ridiculous assertions, probably. this president is going to be worth a lot if he -- >> i'm not agreeing with you. >> we'll see. it may be technical. at this point you don't know why. >> he's on truth social now and nobody is looking what he is

saying. >> you need to pay attention if he is not tweeting. remember when he tweeted as president. >> remember what happened to the value of twitter during that period? nothing. that's the whole point. when he was on twitter, everybody said how is it possible that twitter cannot possibly monetize trump ph phen phenomena? >> who knows? twitter. what is it worth now? it is probably more popular than ever. >> that's why this becomes -- >> i don't know how it was worth 70 or 22. i know the fortunes have doubled in the last couple weeks. federal judge in new jersey rejected the challenges to the biden administration program to allow medicare drug price negotiations. a ruling the program is, in fact, constitutional. the charges were brought by johnson & johnson and bms.

the drug price negotiations plan has survived legal challenges in delaware, texas and ohio. drug companies had been seeking split decisions in lower courts to escalate the issue up to the supreme court. when we come back, amazon is set to report after today's closing bell. we will tell you what to expect next. a programming note for you, this saturday is the berkshire hathaway annual meeting. warren buffett will take the stage to answer shareholder questions for five hours. you could see it all right here on cnbc. you can watch it streaming on cnbc.com. the day will kickoff at 9:30 a.m. eastern time. mike santoli and i will be there along with 40,000 other people. we will be joined by board members and managers and shareholders. a few surprise guests for you as well. we will have full access to

warren buffett on stage and alongside him as his special guests. you can see it on cnbc and c cnbc.com. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. this is our future, ma. godaddy airo. creates a logo, website, even social posts... in minutes! -how? -a.i. (impressed) ay i like it! who wants to come see the future?! get your business online in minutes with godaddy airo when it comes to investing, we live in uncertain times. some assets can evaporate at the click of a button. others can deflate with a single policy change. savvy investors know that gold has stood the test of time as a reliable real asset.

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elon musk is trimming head count at tesla again.

according to the information, the company's senior director of the super charger business will be requeasked to leave today an 500 employees who work in the super charger group. tesla is coming off the best day since march of 2021. elon musk has added $37 billion to his own net worth in the last five days based on the jump we have seen in shares. amazon is set to report results today after the bell. joining us with the pre-view on that is jay woods. jay, we saw the cloud business at microsoft and google with strong results. are we expecting the same from amazon? >> we are. the ad revenue is something we are really going to focus on because this is the first time they report quarterly reports with the prime video ad sales. we have seen the momentum in ad sales across the board. we expect that to continue.

awsshould continue to improve and a.i. as well. a.i. is what andy jassy is investing in. it released rufus which is the a.i. assistant that will be helping you shop when you are shopping online. on the ecommerce side, they continue to crush it on all metrics. fundamentally, it is hitting it. you look at the technicals and it is just starting to make all-time new highs. it is the last of the magnificent seven or six with tesla which we'll talk about in a second. it has the same trajectory of the alphabet. it could breakout of the good quarter and has room to run. i like it on all fronts. >> you mentioned the online component as a an afterthought.

>> we're so used to it. it is expected. it's the gold standard. exactly. when you think of amazon, that's naturally what you think about. andy jassy has set the table for growth in aws and ads continuing to climb. they are going to the playoffs this year. that will be interesting when my eagles are on amazon instead of nbc. they have been hitting on all metrics. the amazon story is moving the needle. >> the extrajectory is picking steam? >> i think so. they have gone up in average of 7.5% the last three. the only thing that is troubling me is the pattern we're seeing given headwinds in the overall market. stocks like alphabet that beat are starting to fade. you see stocks beat on earnings and struggle to make the new highs and keep them.

if headwinds in the market persist, we will see what the fed does this week, then it could struggle th to go on the trajectory. we have seen meta and alphabet add dividends. >> that would be a great thing. forget about continuing to build for future growth. >> exactly. >> let's talk about tesla. huge run-up in the shares if you are looking at the last five trading sessions or so. elon musk going to china was a surprise move. really solidifies that country in terms of the story for tesla which is an important one. >> a tentative agreement. it was a tentative agreement. it jumped 15%. best day in three years. his net worth up $37 billion over the last five days. it is still down 21% for the

year. it is still mired in the two years. they are not hitting on all metrics. revenues are decreasing. pricing pressures in ev continue to mount. china story is huge. autonomous driving is what everyone is watching. that is the next big thing. we are focused on august 8th. the cyber cab making its debut. can that translate globally? the rollout of the model 2. there was a twitter battle saying it would not happen. you assuage those fears on the conference call. it has to be a show-me stock. right now, that's why it is mired in the long-term down trend because they missed on the metrics. the tesla semi. the pricing pressure.

the price points went up and battery life went down. there are a lot of factors in tesla that have investors worried. short interest at the high est level in two years. one of the reasons prewhy the sk has popped the last few days. you never want to bet against elon musk. there have been failures in deliveries. investors have not been running it up like they have in the past thinking this is going to be the big thing. they want them to be shown and we'll get some answers come this summer. >> you wouldn't short it? >> i wouldn't trade it. actually, that's how you play the stock. you trade it. it makes big moves. for me, there are a lot of other vehicles, yes, pun intended, to put your money in right now. amazon being one of those. >> jay, thank you. >> thank you. coming up, a new rule is going to require automatic

emergency braking on passenger cars in the u.s. i don't like when that happens. details straight ahead. there's tons of them. >> you go through the windshield? >> i'm going to stop. it doesn't think i'm going to. >> backing out of my driveway. nobody around. a car in the parking lot. >> did you hear the alarm go off? i see it. i see it. i'm tailgating. all right. eli lilly set to report. ceo david ricks will join us in the first on cnbc interview in the 7:00 hour. >> it's aabrupt. >> you get a rental.

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the national highway traffic

safety administration finalized a new rule to require all new passenger vehicles to include automatic emergency braking. the government says it will save lives and prevent thousands of injuries each year. it will require vehicles to apply the brakes automatically to avoid collisions and stop for pedestrians during the day and night. >> it is already in a lot of cars now. it will be required in every car. >> yup. >> it's a good thing. >> jarring. >> it helps. >> to save hundreds of liefves. coming up, education stocks under priessure. we will bring you the latest. and edward norton will be here in the next hour. as we head to break, the look at the s&p 500 winners and losers.

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good morning. welcome back to "squawk box" here on cnbc. we are live on the nasdaq market site in times square. we are down a bit here. dow off 15. s that nasdaq off 9 points. four lawmakers trying to overturn president biden's new rules to require airlines to issueautomatic cash refunds. joining us to talk about what is at stake is brian kelly. good morning to you. last week was the big announcement. you heard it from the are transportation department. there are a lot of consumers who think it is great. you don't have to make the phone

call or ask. now it appears these four lawmakers, who, by the way, are some of the biggest beneficiaries of donations from the airlines and now trying to insert the line into the new bill to effectively undo it. brian, what is at stake here? >> it was christmas in april last week. almost universally this rule was cheered by consumers. if you pay for a service and you don't get it or choose another service, you should get your money back. you know, these lawmakers are trying to reverse that. i think travelers are now going to get to see how the sausage gets made in washington. although president biden and d.o.t. came out with the rule, congress has the power to legi legislate. that happens in committee behind the scenes. a lot is at stake. >> is it unfair to raise the point that i don't want to say

they're on the dole, but it looks like they're on the dole. they are huge beneficiaries of lobbying money from the airline industry. >> not to mention they all fly back to their districts. they're heavy users. >> these particular four are the money ones. they all have to fly back to their districts. the four who are doing this are the four largest beneficiaries of money from the airline industry itself. >> what does that say? tell me how you get paid and i'll tell you how they act. this isn't necessarily the death nail. there are some interpretations to allow the d.o.t. rules to remain in effect, but, of course, it just depends how it's written. it seems like they are trying to rollback and give the airlines the right to make people jump through hoops. it is egregious to raise fees.

jetblue raised bag fees dramatically. if your flight is canceled, you may get the refund, but not on fees. you need to call your lawmaker. this is a critical election year. the race is super tight. if consumers speak up, now is the time to do it so lawmakers will not slip this therough. >> do you buy the idea coming from the airline industry as a result of the rule that prices will go up materially? >> i will say this. the rules as they are are very prop p pro-consumer. there needs to be morle leeway. the three-hour delay. a lot of times delays are out of their control. air traffic and government staffing. i do think there needs to be a

little bit more leeway for the arti airlines. the airlines are touting better schedules. i don't think they will dramatically go under it they have to refund people ought hat ickly. consumer should get refunds for canceled flights. >> you heard pete buttigieg reference this. he is hoping customers get refunds, but airlines change their behavior to the extent if there are routes that they know in advance that they are likely to have delays on and maybe they don't fly those routes and there is a change. >> there is always a law of unintended consequences. this is happening in legislation all the time it. i don't doubt that may happen. i also hope it pushes the airlines to treat people better. book them on partner airlines. pro-actively get them on another

airline. a lot of airlines don't have partnerships to rebook which leaves passengers stranded. especially low-income page passs who cannot afford to buy another ticket. this is not just the european or canadian compencompensation. this is getting money back for a service not rendered. the main intent of the regulation remains in effect. >> if your business model cannot survive if you don't pay people back for services not delivered, that is a valid argument. >> i would agree. >> can we do that for the wifi on the plane? >> yeah, this covers the wifi and seating extras. you know -- >> i know that, but how often have you gone on to gogo or any of the services and you pay the

$15 or $20 or $30 sometimes and it works for three minutes and it doesn't work for the next six hours. they charge you. how are they going to know to automatically repay you? i believe that business -- that is a crazy business. they know they cannot deliver the product going in. >> they will refund you, but you have to submit the request. how many business people are taking the time? you will refund if you submit the request. i agree. >> fine aal question, brian. this rule is not in effect yet. when your flight is canceled, a, what is the easiest way to get your money back? are you calling the phone number or using the text chat bot? what is the quickest and efficient way to rebook in those moments when you are sitting on the plane and they will deplane because they are cancelling it

in the moment? >> the first thing i would do is go in the app. have the airline app you are flying. some are better than others. they will let you rebook. if you don't want to shell out extra cash and wait for the re refund, see what the airline can offer. take it so you don't have to shell out more and wait weeks for a refund. i lot the chat bots. you can screen shot and get it in writing over a phone call and miss co miscommunicate with the agent. all of the airlines have landing pages. they will send you a receipt. >> brian, good to see you. thank you. >> thanks for having me. coming up in the next hour, we will have former house speaker kevin mccarthy on set joining us live with the latest in washington. that's coming up in the 7:00 hour. reminder, get the best of "squawk box" in our podcas u can listen anytime with your

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welcome back. 3m just reporting results. the company had adjusted profit of 3$3.29 a share. a big beat on the bottom line. revenue above estimates. results twill help price hikes and cost cuts. the numbers through the quarter with adjusted sales at $7.7 billion. the operating marginat 29%. that was up 400 basis points. mike roman says they are talking with resetting 3m dividends. this is coming after the

spinoff. as a result, they will reset the dividend at 40% of the adjusted free cash flow. not giving a number of what that is with the recent dividend of $1.51 a share. roman says this is in line with the peers and above the s&p 500 medium with the potential to increase over time. it talks about everything they have done to clean up the problems they had. for 2024 guidance, they are saying they expect a return of organic growth of1% to 3%. 200 to 300 points of operating margin. that brings it to 21% to 27%. that stock is up 2.1%. >> it is a big yielder. i don't know what that represents. it was yielding 6.5%. >> yeah. they have had legal problems for a long time. they had issues.

>> i don't know if it is cutting the dividend. >> i don't know ooteither. it is adjusted free cash flow of 40%. >> do you have adjusted 2024 estimate? >> i don't. >> saying 680 to 730. >> we'll make it up. meantime, two education stocks under pressure. look at this. shares of chegg and coursera after guidance below the estimates at both companies. chegg says dan rosen will be promoted to the chief operating officer to be the new ceo. coming up, shakeup at paramount as they negotiate a deal with skydance media. we will talk about the new ceo by committee with analyst rich greenfield.

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bob bakish steps down as ceo of paramount and ext extended the final offer. joining us now is rich greenfield. i'm not sure how to characterize it, rich. reading with what it was worth five years ago and the deals

that could have been done and proposed. did shari red sstone go from $8 billion? it sounds like a sh shakespeare tragedy. >> it sounds like it. they missed the wave of consolidation. i think shari wanted to be a consolidator. by the time they merged, it was too late and the company made one fatal mistake. whether it is her fault, she blames bob bakish. the fatal mistake was in may of 2020 as the pandemic took hold and they tried to be netflix. they went out and tried to create paramount plus and spent billions of dollars a year.

that strained the balance sheet to the point they have not been able to recover from and very much why they're in the situation today with the forced sale situation that they're struggling under is all because of that mistake or misstep they made not following the sony strategy and trying to be a content arms dealer. it would have been lower growth and margin, but they would not have been in the situation today, mean forced sale, if they made that pivot back then. >> what does that forced sale look like? i mentioned "succession." if you are trying to do the deal to enrich the redstone family more than the average sha share shareholder, that reminded me of one of the heirs to the head of -- i can't remember the name

of the company at "succession." i need some prevagen. you're young. you can't remember either. rich, i don't know. that's not going to fly, right? what will finally happen? >> you mean waystar? >> waystar-royco. >> bring in andrew for the short-term memory. >> he looked it up. >> i googled it. i have to be honest with you. >> i couldn't see you, andrew. i was just guessing you were the short-term memory. >> credit. >> at the end of the day, what everyone forgets, you have no control. it is baffling to me why anyone is surprised that class b meaning the non-voting para, para shareholders do.

if they want to merge with skydance, they merge. there was a question yesterday of the majority or minority vote held in the press. why would they do that? they have the ability to push the companies together. break them apart. sell them. that is what a controlled shareholder is able to do. there are plenty of companies you look in the tech space with a powerful controlled shareholder. you know, these types of things happen all the time. you may not like some of the actions that a controlled shareholder takes, but that is the risk going into it. if she wants to merge into skydance, she will. shareholders will get roughly 78% of holders in new stock. it will be diluted with skydance and more equity. you will get 22% of your stock paid out in cash around $14 a

share if the speculation on what the pricing looks like is true. look, that's better. you are getting some cash. two days ago, nobody was getting cash in terms of public shareholders. only shari national amusements is getting cash. that's the risk you took going into it. don't own the stock if you don't like that. >> some of the metrics for paramount streaming service seems like it is going pretty well, rich? on a relative basis, is there hope? >> when you say relative basis, joe, you are still losing hundreds of hl millions of doll a quarter. this was the super bowl quarter. advertising was up 14% and organically down 9%.

a lot of things look better with special event programming. i think the reality is this is still a business where even if they get paramount plus to profitability, i don't know the ultimate value. that's what's going to change, right? the skydance merger, if it happens, the one thing that investors are not really paying enough attention to is shutting down paramount plus. you buy paramount or existing management would shutdown or scale back paramount plus and cut costs and gush cash. the plan at skydance is take over paramount and they want to double or triple down. they want to build it into a netflix competitor much like disney or hulu combination. you will see a very big investment cycle the tfrom the

company. again, cart before horse. this will take 12-to-18 months to close. you will have a new administration. i don't know your view on the administration, joe, but this is going to take a while. >> you don't know our view? >> you have never seen the show? >> first-time viewer? >> you agree on that? >> exactly. how about the office of the ceo? that works a lot. it isn't two, it's three. >> you three work well together. >> we do. thank god we're not running anything that actually matters. >> look, the big decision they have to make is they're working on the agreement with charter. there's speculation overnight thatthe deal will basically be a punt and work on the short-term extension and moving toward with paramount plus included for free-for-all for

all charter subscribers. it will be very interesting whether the transaction they do with carharter reacts. >> rich, there is the debt, too. all of the companies spent too much, i think. >> joe, billions too much. that's the problem. they just -- they just didn't think about what their actual profitability was of the core business. >> to be fair, that's what the market was doing. everybody was chasing what the market was valuing. the market changed its mind pretty quickly. >> the thing i would say in this case, becky, their core business. wha when was last time you turned on mtv or nickelodeon? they have all of the channels

that literal ly nobody is watching. i think that business is melting. they should have been aware that paramount plus is accelerating that hemelt. >> andrew, you gave an incredible interview with david a couple of years ago. look, i think we continue to believe that nbc is going to take nba rights from warner bros. discovery. i think nbc does -- nbc has a mission to get the rights and take them away from turner. i think the nba wants to be on broadcast more than cable tv. >> are you a believer that peacock can make that work at those numbers given the economics of all this? >> i don't think this is purely

peacock. i think this is nbc. i think there will be sunday night nba as well as nfl. you may have the nbc post-season nfl game. the kelce game. there will be games exclusive to peacock. disney is putting more games on abc over espn. this will be putting a lot of games on nbc, broadcast network, versus peacock or able network. this is all about following the nfl model of broadcast and some digital. think amazon prime taking a big package. maybe there is an outside shot of netflix with the mid season tournament. this is broadcast and streaming and cutting out basic cable. >> okay. thanks, rich. we're moving on to eli lilly.

i think the stock was reacting positively. it is the most valuable drug stock in the world. earnings at $2.58 a share. revenue at 8$8.77 billion. got strong sales from the weight loss and diabetes drugs. increased full-year earnings. david ricks will join us in a few minutes. it is all about munjaro. it's a jungle cruise with emily blunt. no. >> that's "jumanji." >> we're back in a couple of minutes.

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welcome back to "squawk." q coca-cola out with its results. james quincey, coca-cola james quincey will be on "mad money" tonight. and then the yen is on its weakest levels against the dollar since all the way back to 1990. a market strategist, mark, joins us. let's talk this through. the weakest level for the yen

since 1990 because the fed is expected to talk tougher, and what has been going on for decades? explain that. >> the yen is really driven not by what happens in japan but the policy divergence between the u.s. and japan, so the correlation to move into the yan is to move to the 10-year yields than the yen. in the last part of the cycle, the yen has been weakening. its interest rate was of the last of the industrialized countries to have negative interest rates, and then the japanese ten-year yield is less than 90 basis points. >> what happens next? let's assume that jay powell does talk tougher, and how does this play out?

>> to me that's why i would doubt initially that the doj and ministry of finance intervened yesterday, but the information that came out in the last two hours does suggest the japanese intervened on selling up to $35 billion, and it surprises the japanese would intervene when they know what we know, which is that powell could have a hawkish pivot, and stand on the interest rates, and the inflation was falling towards the target and it's not there right now. at the same time, we get on friday the u.s. jobs data, and the early look is 240 and 250,000, and that would be a solid report and that would seem to push up interest rates and thereby weaken the yen against

the dollar. >> yeah, the yen is 156.90. >> yeah, it got down to 154 yesterday after going above 160. the market will tread gingerly as we approach those levels again for fear of another round of intervention. what happened a couple weeks ago when israel was responding to retaliating against iran, and in an hour's time, the mexican peso, which is the only currency that trades 24 hours a day moved by 7% in one hour. these kinds of things can happen in the foreign exchange market. sometimes the market works itself up into a lather, and it could have respects to the doj intervention. >> mark, thank you. we will continue to watch.

appreciate your time. >> thank you. mcdonald's just reporting quarterly results, and the share coming in at 270, and that missed by two cents. a global same-store sells were impacted, and we would like to know about domestic same-store sales as well. we will get to that. meanwhile, is it 7:00? >> just past 7:00. i am andrew ross sorkin along with joe kernen and becky quick. we have a lot going on. columbia university protesters barricaded an interest with

chairs, and it comes after college officials wanted them to leave the campus. there's a fascinating lawsuit that jewish students now brought against columbia on the theory of a breach of contract theory that they spent money to go to school and now can't go to school, and that's a fascinating case -- >> they want a refund, right? >> i think they want more than a refund in terms of how the breach of contract damages would work. meantime, microsoft in the news. the federal reserve kicking off a two-day policy meeting with a rate decision, and a powell press conference set for 2:00 p.m. eastern time tomorrow. the fed may be expected to keep

the rate policy on hold, and the ten-year yield is up nearly 10% this month. we will have more on that in just a minute. >> people can get a voucher for summer courses -- like the airlines, that's how absurd that is. no, no, you can't give you money. >> a breach of contract case could be brought across the country by students all over. it gets interesting very quickly. >> this is not an act of god, and neither was covid probably. >> the day of sex -- >> what? >> i said it last time and you both thought i was talking about a 24 sex -- >> daisex -- i'm saying it

right. >> we're down 52 on the dow. 20 on the nasdaq. let's get to contessa brewer with a look at this morning's premarket movers? >> we are watching eli lilly shares jumping after reporting revenues that beat, and it was a 26% boost fueled by sales of weight loss drugs, phmounjaro, d others, and more promising drugs in the pipeline to address obstructive sleep apnea. the company raised full guidance by $2 billion, and eli lilly

ceo, david ricks, will join "squawk box" shortly. and another mover this morning, 3m, and shares up almost 5% in the premarket. the company beat revenue estimates for the first quarter, and a new ceo takes over tomorrow. we will end with an analyst call on nvidia, and there's strong demand and an improving supply chain here. you can see the shares slightly lower off by a quarter of a percentage point and they soared over the last year, hitting a lull in the last month or so. you have to wonder if investors see this as an opportunity to jump in, joe. >> we have heard that, contessa. thank you for that >> sure. for more on the fed's policy meeting, we want to get over to steve liesman, who joins us now

with the latest survey. >> the outlook in the survey turning hawkish, and there's a forecast for higher growth and inflation for 2024. only one cut fully priced in for this year and that's in december, compared with multiple cuts in the prior survey. it's like 48-48 for a additional cuts. there's still cuts in the cycle here, but now next year and less than had been forecasts. 3.3%, for the neutral rate. here's the trajectory here. watch the blue bars there. they tell you what the current forecast is, and the yellow bars

are the old forecast, and everything is up a bit. the neutral rate up, and that's compared to the current rate of 5.4%. peter boockvar, he says i think the bond market now is up, and there was an announcement where there was going to be a quantitative tightening, and here's the outlook of the group on this particular topic. they don't expect the fed to announce the begin of the taper, and january of 2025 is when they think the fed will stop. they will take another $700 billion off the balance sheet, and $600 off of bank reserves, so still stopping at a high-level there, but taking a lot off of where they were.

survey respondents forecasting the better growth, and that is with the growing belief that the economy may have to slow and unemployment rise to hit that 2.2 number. >> well, it seems like maybe somebody on the fed and still speaking at this point, it sounds like the message seems to be come ting through to the mars to some extent? >> yeah, i think the markets got it, and the market and fed are reasonably close in line, and in december the fed was less dovish than the market was, and the data has come in. it kind of tells you the reaction function, which is how does the market think the fed is going to react to incoming data

even if the fed doesn't talk. there's a debate, and then one of my colleagues on dot-com is looking at if the fed talks too much. they do talk a lot and maybe they react too much, but we don't see a big gulp on where the fed thinks the market will go, and the market backed off cuts. it makes sense. have they backed off too much? i don't hear fed officials talking about more cuts than the market is talking about. i will be writing up this survey later this morning, and it's a little more hawkish. they are good at gaming out the fed. >> steve, thanks. see you later. >> becky? >> yeah. >> sorry. >> that's okay.

>> tonight it's a group that i have been involved with for a decade now, we teach teachers to teach personal finance, and i will be giving an award, and i will be playing a warm-up sets with members of the up and coming rock band, and so the counsel for economic education, happy 75th. >> that's great. we know the students you bring in seem to know an awful lot about this stuff, too, so well-done. thanks, steve. coming up in a moment, eli lilly's ceo, david ricks, joining us. and then former house speaker, kevin mccarthy, will be with us talking about washington and so much more. "squawk box" coming right back. (♪♪)

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eli lilly reporting first quarter results in the last hour. joining us now, ceo of eli lilly, david ricks. good morning, it's good to have you on once again, mr. ricks. i thought it was going to hit 800, and they hit that in early march, and it was at 795 earlier. big number for zepbound and mounjaro, and prospects for future sales off the chart if you can increase production? >> yeah, up 26% on the top line. over 50% on the eps line, so

super strong. good clinical readouts as well with obstructive sleep apnea doing well recently. as you point out, we need to keep making more. >> i was a bit amused when we came back because i just told andrew that zepbound and mounjaro seemed to do well with sleep apnea, and he said, of course, it's fat people that have sleep apnea, and is that true, is that the mechanism -- >> there are things because of more weight -- >> the data i have is 80 million americans have sleep apnea, and it's a common condition.

>> do fthin people have it? >> some do, and it's a short-term interruption in breathing when you sleep. it sounds like snoring but it's a more serious medical condition. it can affect rhythms in your heart and other chronic diseases, too. when you go to the doctor for many conditions, they say you should try and lose weight. we know obesity and overweight is a precursor to many diseases, so if you can't do it with indict -- diet and exercise. it's the weight loss that improves the symptoms, so it cuts by more than half the

interruptions in your sleeping. it's thought to be a function that overall health and also when we gain weight or are overweight, we are putting that weight in places causing harm. earlier in the quarter i mentioned, if you reduce the liver fatty disease, and here it's thought local fat around the neck and breathing airways is causing distress while sleeping, and by reducing that you reduce sleep apnea. >> get hralipoor something. tell us about the efforts to make enough of this stuff. it could be 100 billion, eventually? >> we don't give out the long-term projections, but we

are doing everything we can to make more product. this is technically one of the most complicated medicines we ever made, and it's a protein therapeutic that has to be sterile and in an injection device. it's capital intensive and complex and highly regulated. we put in the last year $11 billion in announcements in five new projects in the u.s., including a site in wisconsin we just purchased. we are pulling out all the stops to produce more, but the lag time is significant. >> obviously, this is still a shot and that's a limiting factor in how many people can take it and how many people can ultimately stay on it. how far away do you think we are from this turn into a pill or some other form that is easy to take? >> that's incredibly important, for a couple reasons, andrew. one is for acceptability.

two-thirds of patients don't mind the weekly shot and it's a small needle and not that inconvenient, and some people do mind that. the second is production, quantity. it's challenging to execute the scale, and we are talk hundreds of millions if not billions of dev devices needed every year, and if we can get to a solid pill, there's a lot of capacity that can do that, so we can make more to help more people. we have a project in phase three, and we will get data in 25 of those phase three studies, so we are a year out from the data that can confirm the efficacy of that pill, and it's a long name and we will come up with a better name, and that can go a long way and we are excited to get that data in '25.

>> you are looking at safety of the tablet. every day there's a sensational article about mood changes. we're sure the long-term side effect profile of all of these works that work the same way, we're absolutely sure there's nothing we are missing in terms of adverse side effects? >> well, it's hard to say with absolute, and we do know that there are some women who are pregnant should not use these drugs. we have not ruled out that could cause harm to a fetus. people with a history of pancreatic inflammation, and that's rare but those people should talk to their doctor before using them, but in general they are deemed safe and

effective. >> thank you. >> of course. this morning, former house speaker, kevin mccarthy, will be with us for a wide-ranging interview. and then edward norton will join us to discuss the new software startup backed by very big names. "squawk box" is coming right back. at corient, wealth management begins and ends with you. we believe the more personal the solution, the more powerful the result. we treat your goals as our own. we never lose focus on the life you want to build. and our experienced advisors design custom built strategies to help you get there.

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coming up next, kevin mccarthy will join us to discuss all things washington from protests to the fed, we will cover it all. en reaction in the mcdonald's quarter, and it's down a little over 1.5%. "squawk box" is coming right back. >> no application fee if you apply by may 31st at university of maryland global campus, an accredited university that's transformed adult lives for 75 years. you're not waiting to win, you're ready

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congress is back on capitol hill this week, and according to reports, speaker johnson's job is safe for now. joining us to share his thoughts on the latest, former house speaker, kevin mccarthy. we might have been before we came back, we may have mentioned the current speaker, what can you say about his position? >> it's a tough job, otherwise i would still be there. close to the election, i don't think democrats would remove him. i think he's fine between now and the election. >> would you have done the same thing with the funding, with israel and taken the democratic

support? >> i never think if you are the speaker of the house and you have the majority, why do you let the senate republicans lead in the minority. it's the same of on what i would have done with the debt ceiling. we are sitting in a world that looks like the 1930s, and why give doubt to iran or anybody elsewhere we stand. i would have went to the president and not negotiated with the other leadersf i negotiated with the other leaders, the debt ceiling? hakeem and schumer can't agree to that. you go and negotiate directly with the president and you put the border with ukraine, and you would have got it done before thanksgiving and it would have been a win-win for both sides. by waiting you got schumer what he wanted to bring to the floor.

>> the threats are still there, not so much from matt gaetz but from some of the people that occupy that sector of the republican party, marjorie taylor greene -- do you think the bloom is off the rose a little bit with that faction, or will they come back with a vengeance? >> structure dictates behavior in business and in congress. if you hadeight republicans sitting in a majority that work with all the democrats to determine who the speaker is, and there's no consequences that they broke the rules, you will have chaos. that's what you have now. the interesting part here, it's easier for republicans to win seats in the next congress than it was for the last two congresss, and you have had redistricting in north carolina, and you pick up three, and hakeem did not do well, they did not get wisconsin and they got a seat down in alabama and louisiana, and that gets

overturned. last time biden was on the ticket and i was the leader, and the first time since 1994, not one republican incumbent lost. at that time biden's fav rawability was up and now it's minus 10. when i was leader, the super pac had more money, and now it's a disadvantage. i am watching what the democrats are doing, especially with the act blue. money in politics is not equal. we will pick the seat up in michigan, right? if you look and you go to pennsylvania. we had a terrible gubernatorial

candidate, and i think we will pick up three seats in pennsylvania. i think we have five seats in california and two more to go. >> does the money matter, though? >> money matters to a point. if you are not competitive -- it's like a chess game. if the democrats are able to make other seats competitive where you are playing defense, then you are in trouble. what we were able to do before is expand the playing field, if we are playing in oregon and arizona where other republicans are losing, that's where you are playing offense. >> you understood this and worked your way through the politics, and does mike johnson understood that? >> it's the responsibility of the speaker, and he's out there. the challenge is it's money to raise. you have to raise that money not just for the party but the members as well. they are falling a little behind -- >> do you think trump will be able to close the gap? >> well, this is a strategy the

democrats are doing against trump and two-fold is playing back against them. they are bogging down trump and spending his money on attorneys which gives them an advantage, and they are losing that. regardless of what you think about donald trump, does anybody in america believe he would be on trial today if he had not run for president? it's an attack on democracy. >> if he had not run for president? >> had he not run for re-election for president now? >> that hush-money -- >> okay, you think just the word it's possible, then i don't you don't believe that. >> i think it's very possible. i think, in fact, i think it would have been easier for the folks who brought the cases to bring it otherwise, and i think the fact that he was running

made it harder. >> kevin, the opposite argument he made, the reason he's running is because he wanted to put a stop to -- >> do you believe biden was effective on trying to clamp down on his opponent, they would have brought the case a long time ago. >> they tried to kick him off the colorado ballot. if you want to make the argument about democracy, i have watched so many things that we keep transpiring here, but they are losing that argument because they are combating against democracy and denning somebody the ballot and going after somebody right before the election, and some of these lawsuits are frivolous. >> nobody serious believes the stormy daniels trial would have been bought, and bringing together misdemeanors and then not telling you what the crime is that takes it to the felony. it was on the desk of the new

york prosecutor for four or five years and nobody did anything with it and alvin bragg brings it up. you just look at the response nationwide to that. the other ones, maybe you got something there with the documents or the georgia case. >> but you have not got the documents with biden. i think what america really needs right now, where are we going to stand on ai, and where are we based upon energy? hopefully i will come back in a couple months and announce something very exciting, and these are things i focused on -- >> part of the issue of the debate, there's the debate of the future of the country and what that looks like, and there's a huge group of democrats having a debate on what they think democracy is and

if that would hold on if former president trump becomes the president. the article that suggested that he wants to remove the independence of the federal reserve, and if he can't do it legally he will try and make a secret deal with the next fed chair. it's that kind of thing, it's the heritage foundation's documents on how they want to effectively undermine the current government and throw out, you know, 70% of the employees. it's that that has people concerned about the quote, unquote, future of the country. >> i get that. it's interesting. i just had gone through a little college at georgetown and harvard for some of these debates, and both parties are debating the attack on democracy but we both look at it fundamentally different. i denounce anything that happened on january 6th. i think what happened there is totally wrong in all shapes or

form. i was removed there from every aspect. but do you think it's right for another party for political purposes tries to remove somebody, your opposition from a ballot or takes to court frivolous matters before an election. people think it's the same argument, and maybe you don't think about this, but before the last election, you have those now sitting from secretary of state and all different aspects of government tell america that the new york post story was russia collusion, and they went out and got 51 people from the cia and others to tell the american people no, and then they went to businesses that run social media, you can't repost that and if an american does, you have to take it down --

>> former president trump used that letter. >> yeah, and -- >> how do we fix that, kevin? >> we don't sit and think our elected officials will fix this. the uniqueness of america, of the people, by the people for the people, we all have to engage, but why do we just want to defeat the other side? in america today, you have people that have a win-win decision-making process. >> i think that's where most average americans are. we are looking at it from not washington or new york, and most average americans say here is what i would do if we can pull some of the problems together. >> serving in congress, there are some on both sides of the aisle that think that way, and then there's the eight, and why did every democrat go with them?

it's because it was a political advantage. i think presidential elections should be aspirational about the future. we can control what they debate about if that's what we will vote about. but today the moderates are those -- i wouldn't call them moderates. i think that's unfair. if i am a conservative and i want to govern, and because of that you call me a conservative, and i think that's wrong. >> greg, he's very conservative -- >> like, sinema, she can't get re-elected because she's a conservative, and also manchin. >> who is in the poll position for trump's vice president now tim scott?

>> i don't think trump would tell us who he will pick. >> do you think it could be desantis? >> well, president trump picking mike pence, two months earlier he was against him in the primary. i think tim scott is an ideal candidate for him. you need somebody that understands the senate andthe house and somebody that would expand the party. another number you should look at if you love data, is not just that president biden won the election so narrow, and if you look at the polling in the hispanic and african american community based on where he was four years ago, he's in real trouble. >> yeah, and there's even a column post joke about the loss of the support that you don't hear much usually at that dinner, which you missed. >> thank you for the insrupb

ta invitation, and if you invite me next year i will attend. i don't want you to cancel me. >> well -- >> i have another question. when you talk about democracy, pbs that gets money from the government, 87 of them, they are all democrats. do you think that's wrong? >> you want to talk bei now? >> no, but the country as a whole, we wonder why they don't trust things. let's talk college campuses. i will tell you, what is happening on college campuses today was happening in congress years ago. i had congresswoman talib having an event to denounce the creation of israel and i had to pull back the rule from inside congress. you had omar saying america and israel was equal to hamas and the taliban, and nancy pelosi as

speaker said i will not rebuke her, she's an integral part of the democratic party, and i removed her from foreign affairs. you wonder why it's happening on college campuses, it's because it started in congress years ago. >> the pbs piece is -- >> well -- >> there are people who say, and this goes to the whole democracy thing, on a popular vote basis, more people voted for a democratic president than republican spread and the supreme court today does not republic the popular electorate. you can -- >> only two universities -- the supreme court only came from two

universities two years ago. remember this, if the country -- we strive to be a more perfect union. let's move in that direction. >> thank you for all the time. "squawk box" will be right back. this is "real time insights." i am here with ey america's deputy vice chair assurance. i know you spend a lot of time with cfos, and how does technology change the way they report? >> companies are closing their books than ever before, and this

gives them time to make more strategic decisions. with new technologies always come additional risks, so they are spending time making sure they have the right safeguards in change. >> what about auditing? >> today we can take large data sets and distill it down in a matter of minutes to identify anomalies, trends and risks in the data. this allows our people to ask better questions and to bring more enhanced insights to the companies that we audit. >> what makes those insights unique? >> it's the fact that they are grounded in independence and objectivity. at the end of the day, this is all about confidence, where there's trust in the financial reporting, it allows companies and their stakeholders to make critical decisions with confidence. >> natalie, thank you for sharing your insights. >> thank you so much for having me.

still to come, actor, filmmaker and entrepreneur, edouard norton will join us to talk about his software startup. he will explain it to us. in the meantime, let's check out the futures. dow futures off by 41 points, and the nasdaq off by 21. "squawk box" will be right back. 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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and they're all coming? in a nissan pathfinder, the search is the adventure. those who are still with us, yes. grandpa! what's this? your wings. light 'em up! gentlemen, it's a beautiful... ...day to fly. welcome back to "squawk box." our next guest is actor, film mack maker, and investor, the cofounder of board presentation startup. they cleared a $7.5 million

series led by salesforce ventures and coastal ventures, and a lot of big names involved in this. we want to thank edouarward for joining us. >> where did you come up with the idea for this? >> i definitely had a number of people say to me, you have an interesting day job and why would you get involved in something that is down in the weeds, and that's a fair question. i have spent most of my adult life on my theater board in new york, and conservation organizations, and started off with the housing financial sector, and i have been on a lot of boards and increasingly as my career in business and investing, i served on corporate boards as well. >> an early investor in uber,

and -- yeah, people may think of you as an actor, but you have been in this position for long time. >> yeah, we worked on analytics with bdo. you talk about uber, and when i look at ride hail versus taxis, and i would say ride hail improved the relationship between riders. you know, boards are supposed to be something that is positive for an organization. there's a governance function but companies in the early stage, they have the board for support and wisdom and acceleration and guidance and all of these kinds of things. too often that relationship

desolves. a lot of that we think has to do with the tools. i had the experience even recently of getting the 90-page pdf, like, 24 hours before the meeting, phone. getting into the meeting, and then the ceo reads you back the 90-page bible you've just read, verbatim. and you're sitting there with your eyes glazed. no one has -- and you sit there thinking, a couple of us thought, you know, in 2024, in a world where everything is in cloud-based tools that allow with multi-function dynamism to do all kinds of things, how can we be doing this really important corporate function on old thick slide files. it's ridiculous. >> some of the best ideas come from trying to fix the problem, in this case, that was yours. do you see this as something just for boards or ultimately, do you see something as where people are going to use this to build decks, if you will, for

just about anything? >> it's funny you say that, our internal joke is hashtag death to decks. i really do through that companies building presentations in fixed slide tools is really ridiculous today. >> so smomicrosoft and powerpoi should watch out? >> maybe. we have a thousand nonprofits and companies using this now. we've gotten effusive, almost emotional like feedback, like gratitude for helping -- from both people who sit boards and people who are in management. because we want -- >> how is it different? i've read a lot of about it. >> for one thing, the way it's built, the idea of a company going pencils down for ten days before a board meeting is such a terrible waste of time. and we've taken a lot of that set-up time, using ai and just interface that makes it so much easier for the company to build its presentation. but we've also really challenged

the idea that you shouldn't be able to -- you should be able to expect that your board has read something, and you should not have a board meeting be rearward looking as much as forward looking. and we've done a lot to try -- we say the quantitative in terms of time that it takes for everybody to get ready, but the qualitative, you want the qualitative component of the meeting to be more productive. and so the -- but in essence, we've had a lot of -- >> what we're seeing on the screen. >> yeah, and it reads like you would read "the new york times" on your phone. one of the most important things is to be able -- if i'm reading it and i have a question, i want to be able to query in the platform and get answered before the meeting. and i want to be able -- and if i'm the management, any send it to you sand walk into the meetig and don't know if you've read it, the management can see how much time has spent in what sections of it. >> that's cool. >> the team that always puts

these decks together, there's always a whole group of people who are basically staying up all night for days on end to try get the board all the stuff, right? >> yes. >> does this make that part any easier? >> much easier, much, much easier. i always say, nobody's dream of their life was to be a great builder of slide presentations. like, it's the ba bane of everybody's existence. my partner said, remember the scene in "punch club" where you punch yourself in the face. he said, i just came back from a board meeting and i'm pretty sure the ceo walked out and punched himself in the face. it just went terribly. >> i don't know if you think this ultimately takes over from a microsoft powerpoint or if you think prezio, which has tried to make a dent in space, or keynote, which is an apple product. >> those are what i would call more general note-making tools, and organizational tools.

we really focus -- let's look at it this way. if you talk about three pillars of the corporate experience, legal, cap table management, and board governance, right, we took legal into the cloud. carta, no company does excel spreadsheets in a law firm anymore. nobody sends you a fedex full of documents with a signature tag on them. you get them in docusign. we have not taken the board experience and the governance process. one of the things we built in, why should you spend an hour in a board room voting on prince approvals and stock options taxes. you can do that in a pre-approved voting mechanism. there's a lot of governance functions that should not require a bunch of busy, talented people to sit at a table and say aye on a zoom call. it's ridiculous. there was a lot we felt that -- and the basic -- those basic functions. we have, to your point, have had

a lot of the management teams already start using it, both for financing, pitch, as a financing pitch site, as a data room, and also for investor updates and things like that. it is better for those things, as well. >> before we let you go, we've been talking about streaming a lot, about the future of paramount, for example, and we talked about peacock, given that they may be getting the nba rights with nbc. you've said that you think that netflix could double its market cap as a function of advertising. i'm curious, if i were to -- maybe it's unfair, since you have to do business with all of them. >> they're all -- we're switzerland. edo, we work with everybody and they love us. >> if you had to invest in one of them, what would you do? >> that's an interesting question. i guess, i would maybe pass on that question. but i would say that i think that, you know, when people like bob iger are saying that ad-supported streaming is going to be a big growth sector of disney's revenue, people should

pay attention. you know what i mean? and as netflix passes whatever they're at now, 25 or 30 million ad-supported accounts, like, to me, and this -- i think this is a statement that's support oif all the legacy media companies, because for a long time, they lost market share to streamers, to companies like netflix, right? the -- there is no question whatsoever that this is an incredibly significant moment that they can move their content through an always on demand format. they have all of the identity data that facebook and google have within the streaming construct. so if i'm placing my ad, i would rather place it with disney or nbc or warner discovery or netflix in their streaming thing, because they can give me granular targeting in the same way that google and facebook can, but with the power of tv. i believe what iger knows and

what netflix is realizing is that they're going to be able to charge some of the highest kpms because of the combo of television plus data that is what's going to make -- and that's why i've said -- and i'm not being facetious. i think that linear tv is kind of toast. i think even what we associate with live tv now, sports and events and news, will be made available through the streaming format as opposed to -- if i was a cable company, i would get ready to be nothing but a broadband delivery company, because nobody -- my kids are 8 and 11. they cannot even conceive of the idea that they would schedule their lives around a program, for anything, not even sports. and i think we are going to see that television, even ad-supported television is streaming and netflix will be one of the biggest networks in history. >> here we are on linear tv.

>> you're going to be fine. you're going to be fine. it's just not going to come through a cable box. >> edward norton, appreciate for coming in this morning. appreciate it. >> who cares about. it's the content not the price. >> mike shiner, tour defo force. did you go in? >> yeah. >> who won -- jared leto? who won that year for best supporting? do you remember? >> no. no. >> it was j.k. simmons. >> that's right! for "whiplash." he was great. >> i know. coming up, check on mcdonald's and street reaction plus a fed gets off a two-day meeting today. a look at where u' ptiyoreutng your money to work in maybe. we'll be right back.

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welcome back to "squawk box" on cnbc. among today's top stories, elon musk firing two senior executives at tesla and plans to lay off hundreds of additional employees, and that's according to the information, which says that job cuts will come in the super charger and new vehicle divisions. and finance founder cz is

set to be sentenced today after pleading guilty late last year to enabling a money laundering at his crypto exchange. the government is asking for a sentence of three years in prison. and walmart aiming to retain shoppers that it's picked up during the current inflationary times. the store debuting a new premium grocery brand called better goods. though the line is designed to be trendier, most items will be priced at less than $5. let's take a look at the future thris morning. we're in the red. dow futures off by about 50 points. the nasdaq off by 21. treasuries has been hangin ing there, kind of in limbo. right now, the ten-year is at 462. the two-year is at 497. let's get straight over to contessa brewer. she has a look at this morning's pre-market movers. >> paypal shares are just

soaring. it just reported earnings better than expected and said its focus on cost efficiency is paying off. there you're seeing shares up almost 8% in the premarket. 3m beat earnings and revenue estimates, announced it competed a spin-off, finalized two major legal settlements. its shares up 6 .3%. the companies reaffirmed full-year profit guidance and raised revenue guidance, but there you're seeing the shares off slightly, 0.2%, because of warnings about intense inflation in certain markets. of course, that has investors concerned. ceo quincey will join jim on "mad money" tonight. eli lilly shares jumping after raising its full-year guidance and praising the performance of weight loss drugs, says it has more in the pipeline. those shares up about 7% on the day. becky?

>> all right, contessa, thank you. mcdonald's reporting its quarterly results this morning as well. we talked about it a little bit ago, but the adjusted earnings per share came in at $2.70. research was little better than anticipated. the stock is off about three quarters of 1%. joining us for his reaction is andy barish, he is jeffries equities analyst. what do you think of the results? the miss on the bottom line, but better than expected on the top line. >> good morning, becky. -- ongoing with conflict over there, but otherwise -- >> andy, i'm sorry, you froze up at the beginning. can you start over and just tell us what you were thinking. >> yeah, apologize for the tech there. yeah, mostly related to the middle east conflict and the challenges that mcdonald's business is seeing over that market. it's not a big market for them,

but enough to kind of cause a few pennies here and there. otherwise, the core business was in the u.s. and europe was right down the middle. a little bit of a slower start to the year, but that was expected. >> this is about boycotts of the brand in the middle east that you're talking about? >> exactly. and that's over in some other, you know, muslim countries. >> what about sop situation in the united states? what's the demand look like here? >> the traffic environment is tough, as mcdonald's and others has talked about, the lower end consumer is definitely watching dollars. we think mcdonald's is as well positioned as anybody, but it's certainly an environment where, you know, the brand is going to continue to get a little bit shaper on promotion and value, but we think at the end of the day, we'll continue to gain

share and drive positive same-store sale for their business, which should outperform the category. >> they have talked about how by raising prices 10% last year, it did impact the number of some customer bases had in terms of coming to the stores. is that something you think that eventually plays out, or will they have to roll back any of those price increases? >> no, and i don't think their pricing was that far off from what others in the quick service category and the overall restaurant category actually took over the past couple of years. so now it gets down to kind of executing the brand and a little bit more promotion and value, which i think is going to actually come through the app in rewards, where mcdonald's has very, very strong digital properties. so i think they'll be able to protect traffic. first quarter traffic was negative, but we think they'll be able to make some progress as the year goes on.

>> andy, thanks for joining us. >> a good morning. >> meantime, our next guest talks to us about the markets, his expectations for the fed this week, i want to bring in joe matto. he's got 44,740 billion in assets under management. what are you expecting the fed to say this week? >> i think the fed has tloed the needle pretty carefully, because clearly they need to move more hawkish, given the inflation ratings we've seen over the course of the past several months. that's clear. at the same time, the question is, do they maintain the easing bias. that's our sense, they'll maintain that easing bias. and i think you'll see some additional volatility if the fed raises that possibility. >> what kind of language should we be looking for? we're not going to be looking for actually any moves? >> it's all going to be in the

statement. but again, i think being able to craft that statement to thread the needle is my guess is -- my sense is he'll probably reiterate what he talked about several weeks ago, in clearly saying inflation is an issue. >> what is your best guess? when your clients call you and say, what's going to happen to interest rates by the end of the year, you tell them what? >> we think they'll cut a couple of times and the bias is lower. we think that inflation, direction of travel is still lower. yes, there's been clearly stickier readings over the course of the past couple of months, particularly in areas that are more susceptible to labor wage increases and housing has been a challenge, but some of those are -- i hate to use the term transitory, but some of those will come down over time. >> you disagree with the jamie dimon view that actually things will be tougher for longer, and you might even eat rate hikes?

>> of i think rates will most likely by higher for a long period of time. that doesn't mean that the policy rate will stay at 5 to 5%, we think it represents value and where we think real rates are going to be. but rates will be higher than people thought six months ago. >> if you're right, what do you see about equities? >> i think rates higher for longer will put more pressure on the lower end and smaller companies. right now, if you think about first quarter earnings, you have lots of different trends underlying. you have technology companies up 30%, everything else down five. small caps will be expect to be down 20% earnings in the first quarter, down 14 in the fourth quarter. you see that pressure, where those large cap s&p 500

companies, pristine balance sheets, super hilg quality, globally competitive companies are doing very well in this environment. >> okay. we will see. joe, thank you for coming in this morning coming up, house ways and means committee chairman representative jason smith is going to join us ahead of treasury secretary janet yellen's testimony on capitol hill today. let's get a check on crypto prices right now, weaker this morning. we'll be right back.

a recent tweet, president biden says that he will not extend former president trump's signature tax cuts once they expire. the president said donald trump was very proud of his $2 trillion tax cut that overwhelmingly benefited the wealthy and biggest corporations and exploded the federal debt.

that tax cut is going to expire if i'm re-elected, it's going sty expired. the chairman of the house weighs and means committee wants to ask treasury secretary janet yellen about that tweet when she testifies this morning. joining us is the weays means chairman. congressman, chairman, let's talk this through a little bit. let's play this out, maybe the best we can without getting too involved in re-elections and elections and what's going to happen in this next outcome. how does this all play out for the american people. >> well, at the end of 2025, every american will see a tax increase, because more than $4 trillion worth of taxes will sunset december 31st, 2025. that includes the doubling of the child tax credit, which was $2,000, will be slashed into half to $1,000. the larger standard deduction, which the majority of americans

use when they file their taxes will be more than cut in half. and the small business rate will approach over 40%, after this sunsets. it's quite disturbing that you have the president doubling down once again, that he will allow to trump tax cuts to expire. >> what we've been hearing from people we've been talking to about this, that the more likely scenario is that much of this is going to stick around. as you mentioned, a lot of these are really popular programs, whether that be the child tax credit, the standard deduction, the earned income tax credit. is there the likelihood that there would be some sort of coalition in congress that would pass a slimmed down version. >> i sure hope so, if you look at the tax relief for american workers and families act, that the house passed with 84% of the vote, had numerous provisions from trump tax cuts that have expired or they're starting to expire, including research and development expensing, bonus

depreciation, interest deductibility expensing and also the child tax credit. it's over in the senate right now. that's a first step. h however, next year, you'll have to look at republicans and democrats looking together. that's why i set up ten different tax teams within the ways and means committee to break up the tax code, to work with other members of congress, and also stakeholders so that we do now allow these taxes to sunset. >> the idea that we keep hearing is that you do have to pay-fors for some of these things. how would you pay for it? >> well, if you look at how we did the trump tax cuts in 2017, there was numerous pay-fors. one that has gotten a lot of conversation is the salt cap. the salt cap at $10,000 created more than $800 billion in pay-fors. which there's numerous other areas to look at. there's some tax provision that we believe are only tweaked to focus on special interests.

and we need to eliminate those, try to flatten the base and spread it out. >> congressman, we said there's no such thing as alternative facts, but if you tualk to a republican or a democrat about those tax cuts, i hear alternative facts. in that tweet, where the president said that the vast majority of those cuts went to wealthy individuals and corporations, i think it was yesterday or the day before that we had our own robert frank on, was it 62% to lower-income people for tax cuts? how much of that tweet is factually correct? and we don't talk about fact checking president biden very much, but the other guys have got to be fact checked if you even see him walking along, he's got to be fact checked. how much of twhhat tweet is tru. >> if you look at my congressional district, working class americans, median income

households around $40,000 a year, under the trump tax cuts, if a family of four makes less than $63,000 a year, they will pay zero in federal taxes. that's really tax relief. in fact, if you analyze the 2017 tax cuts, people who make less than $100,000 a year averaged a 16% cut on their taxes. >> congressman, i guess if you get into the salt deductions or salt tax limit on these things, what we've heard is that a salt idea might be out of way, like a new york, new jersey, connecticut, missouri. and $43,000 is a much lower standard of living for someone in these areas. how do you balance that out? >> yeah, you know, that's what i've said all along. especially when looking at the salt deduction.

we are going to have to find common ground and balance. because it is a real issue to the folks that live in new jersey and new york and california. some of the higher taxes jurisdictions. but in places like missouri, texas, florida, it's not nearly as significant of an issue. you have the fights on both sides, should you subsidize other states. this is a huge debate. that's why it sun sets in 2025. that $10,000 cap on salt is completely eliminated in a returns back to normal. but also, the amt comes back, which was also something that drastically affected the people in, for example, new york. >> so is there any common ground, or the answer is, we're still working on it? >> oh, absolutely, i think there's common ground. and i think that the tax package that we just passed, with 84% of the house of representatives, which was negotiated between myself and senator wyden, who's

the finance chairman on the other side of the building, that shows that republicans and democrats can work together on economic policies. >> congressman smith, thank you. we will be watching those hearings today. >> thank you. >> thank you. coming up, where investors will be putting their attention when amazon reports earnings after the bell today as we get ready to close out april. the stock showing a 20% gain so far this year. stay tuned, you're watching "squawk box" on cnbc.

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and they're all coming? happy mother's day those who are still with us, yes. grandpa! what's this? your wings. light 'em up! gentlemen, it's a beautiful... ...day to fly. all right. welcome back to "squawk box." the futures this morning still in the red, a little bit of improvement. dow futures down by less than 25 points. s&p 500 futures down by just 3. the nasdaq down by 18. amazon due out with first quarter numbers after the bell today. kate rooney joins us now with

>> what to expect. wall street is expecting 14.7% aws growth. that would mark the second quarter of reaccelerating growth for aws. investors are looking for nigh signs of last year truly was the bottom. anything below that rate could signal azure and google cloud taking market share. and on the other side, investors are looking at north american retail margins and free cash flow margins. both have really improved as amazon has been spending on fulfillment centers and logistics, at least during covid. that's starting to pay off, and faster delivery speeds have also translated to growing prime membership. that prime fly wheel effect. advertising, we talked about this, another high-margin business. it's really one to watch. amazon has moved into tv-style

commercials. it now has this paid ad-free tier for prime. that rolled out in the quarter. and ads do tend to be a smaller portion of revenue, but growing at roughly twice the rate of aws and ecommerce. and amazon, notably, the only big tech company other than tesla, not paying a dividend. analysts that i'm talking to say, do not hold your breath. it is not widely expected. the street really wants to see amazon reinvesting, especially in ai, higher capex on the aws side is expected and amazon needs to prove that it's spending to compete in cloud and ai. but it is a balance. meta was this cautionary tale on the spending narrative. amazon going to need to show that they can monetize ai. investors will be looking for any commentary on how they're going to do that. >> we will be watching. thank you, kate. when we come back, some breaking economic data. we'll bring you a look at the employment cost index for the first quarter. this is a number that's taken on somedd aed meaning lately. stay tuned. we'll bring it to you right

after this.

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employment cost index. let's take a look at the futures this morning. you can see the s&p is down, nasdaq down. we're getting a back a little bit. take a quick look at treasures and the ten year, now at 4.61% and we've got cryptocurrencies taking a bit of a step down, with bitcoin down now to 61,000, even either threatening to break under 3,000, where it has been recently. rick santelli standing by at the cme. and in chicago, but you can opine on whatever you want. we've got some yen issued. a lot of people talking about the yen today. >> yeah, i think the yen is important. i think historically, the japanese understand that intervention is a very short-lived scenario. yes, you might be able to reverse it from above 160 back

down to 156, but it doesn't last long and the challenges are the notion that how much it costs to support one's currencies versus any type of lasting effects in the marketplace, it just doesn't work but the japanese have really no choice here with the interest rate disparities between their country and many of the other economic horse-powered economies, i can't see any way around this and the esi for the first quarter is hitting the wires. we're expecting up 1%, but this one is definitely coming in warmer. 1.2% and there's something magical about 1.2%. pre-covid, that was the high. that was in march of 2003 that it was established. this number series began in 1996. 1.2 equals where we were in the first quarter of last year.

to find a higher number, you have to go to the second quarter of '22, and the quarter before that, the all-time high at 1.4. the employment cost index, i'm not sure exactly how the effects of some of these issues for example, on the west coast, about where they raise the price they're paying employees, especially fast food services, minimum wage. all of this, of course, is playing into the notion of how much it costs these days to pay employees and all the pressure and if you want to pay someone $100 an hour to work at a fast food place, don't be surprised when the hamburgers cost $50. that seems to be something going on. very quickly, hard to recognize the country. their trying to stop companies from renting and buying homes. industrial corporate policy. it's almost like they've outlawed mergers. global wealth tax, 809 years ago, there was something called the meghnagna carta.

non-compete clauses. the government's got their snoz in pretty much everything, joe. back to you. >> i saw that today. it's going to be a slow creep, but some people want us apparently headed there, which is mind boggling. we're going to need an, oh, no, i'm not going to say it. i was going to say, no taxation without representation. we wouldn't have any with a global wealth tax, and we might need a tea party, but that's your line! i'm not even going to say it, rick. >> yeah, no, tea party, freedom caucus, whatever you want to call it. you know, i know that they all seem to get black eyes lately for sticking to their principle s! we're all supposed to be wishy-washy, go with the polls. what do the polls say? sometimes you have to be big enough to overlook the polls, okay? senators like marco rubio, i might not agree with him on everything, but i certainly do give some of these politicians credit for having principles. standing by things when it gets tough. i haven't even mentioned

universities. that's such an embarrassment, i'm not even going to go there. >> well, this is a perfect intro. you always sort of pave the way for our next gentlemen. steve liesman joins us now with more. we'll get to seth in a second. what do you think, steve? >> it's great that rick has covered all of that stuff, so i don't have fop i'm going to move on and talk about the data here for a second. this is the -- andrew did a nice job of selling this number and the tease leading up to it. this is an important number. it's probably the most significant number when it comes to wage inflation that's watched by the fed. and rick did a nice job of saying, it wasn't good news at all. i want to explain how we got that bad news. before i say that, i'll tell you that the doves, those who were looking for lower rates perhaps or rate cuts this year, they were banking on this number coming in where it was expected to be, at 1%.

the 1-2 is a big, significant, and important miss in the debate over the federal reserve here. how we got here, maybe the one tiny bit of good news, is that maybe there was at least an acceleration in the wage component. that was still evaluated at 1.1 compared to 1.1. it was an elevation in the benefits component, which went up to 1.1 from 1.07%. it wasn't really so much an acceleration of minimum wage probably had a smaller, infinitesimal impact here. but the thing is this, powell is looking for this number dom down as the leading edge for service inflation to decline. and therefore, if this is not going to decline, powell is going to have less confidence. powell and the fed broadly are going to have less confidence that the service sector and inflation is going to come down. this was in line with kind of the theme we've had, which is giving back progress.

that 1-2, we've been coming down pretty steadily so back to the first quarter. maybe they've gone down again. july, just 24. and here we are, guys. this is an interesting development. september, now on the precipice, at 50%. so we may not even have september, as you know, our cnbc fed survey only a 50% probability or greater for december with pretty much even with december. >> thank you for talking about more about this, new data, the economy, and the fed meeting that kicks off today. good to have you both on set. unlike when we're remote, i can throw out a question and i don't have to say who i'm throwing it

out to. do either of you think we'll have rate cuts this year. who wants to start? should we? i think that a little modesty is appropriate. i think that the future is perhaps not just for the first time, indeterminant. i think an interesting question is whether or not we might have a hike. >> me too. >> the zero probability assign thood is excessive or adequate. and there's as much of a chance of a hike as there is for two rate cuts and perhaps as much as one. >> that makes a big difference, doesn't it? we have go to get this straight, as a great anchor once said. either two rate cuts or we might get a hike. the market, it's going to matter. >> it's going to matter and matter a lot, and i think jim's point about how much repricing we've seen over the past four

months is absolutely critical. and i suspect we'll see the same types of seismic shifts. i'll take the under in terms of jim's forecast, but that's entirely predicated on our view of whether inflation is going from here. the eci number is really important, but if you spend a lot of time with the data, because you don't get invited to parties, then what comes out is, usually, it's the consumer price inflation that drives wages and eci, as opposed to the other direction. and so, we are pretty convicted that inflation keeps coming down from here over the rest of this year. and that's why we're sort of leaning into their being probably even three cuts this year. >> as we've seen number after number come in the last couple of months, have you wavered at all. have any of them caused you to say, maybe our -- you know, our primary thing we're talking about isn't really happening? zb >> absolutely. the characterization of people

being never right is tricky. if we break down the components of inflation, it sort of lets us stay in the same place. housing inflation, it's been coming down for a year. it's still evaluated, but it's coming down. and all of the available data on current rents right now, that the bls is going to use to spread out for the next six, nine, and 12 months, that's clearly indicating that part is going to keep coming down. if we go to other services that steve liesman highlighted, one of the key components holding that up is auto insurance, which has been on this jag for a while, because people had to negotiate with their regulator and it's going to come off later this year. but it's not driven by the current state of the economy. so we feel pretty good that things are coming down. but it's uncomfortable. >> what do you think, jim? >> i think that there's too much weight assigned to the rate inflation, and not enough to the level. so you never recover the purchasing power you have loft to inflation. in times past, prices would

rise, prices would fall, but now in the modern age, they always go up. and this helps to spexplain the dichotomy between how people feel and how this kind of okay economy is presented statistically. as recently at 1983, borrowing costs were part of the cpi. they are out of it. but you know, people are paying a lot for mortgage rates, of course, but also for -- >> borrowing costs got taken down to 0 cents. as if you don't need that to -- >> well, they're out. but car payments, car loans are very costly now, and we all have been in credited. so i think that the inflation problem is persistent and defruited, not only in finance, but also in culture. inflation is a cultural phenomenon, too, i think it's something for nothing thing with inflation. >> we do forget that. someone goes -- someone on, you

know, only has so much money and has four or five kids, and looking back two or three years ago, and we saw what happened with the 40-year highs. if inflation drops to plus 2%, they're still at the supermarket, and the stuff they were looking at last year that they already were having trouble making ends meet, it's 2% higher than that. we forget that. inflation doesn't -- when it comes down, it doesn't go down. >> i completely agree. and i think this is a key tension between the perception about the economy and the reality of it. people do look at the levels. and people who want to buy a house, young people, 25 to 35 years old, they look at the price and the mortgage together. and that's why i think a lot of them view -- however, we've been adding hundreds of thousands of jobs per month. we've been having a sub-4% unemployment rate for quarters. if we look in terms of -- we were just talking about the employment cost index. if we l cocompare what's going those were up for the boston half of the income discriminate

relative to when this whole thing started. >> but now you're arguing for no cuts again. if inflation is the slightest bit of a question, and we haven't slowed a lot of those metrics, are we restrictive? and do cuts make sense? >> oh, but i think all the metrics that are important, right? core pcu inflation peaked at 6.5%. we're well below that. and if we're looking at the month-on-month rates, january was clearly outsized -- >> don't we need unemployment to go up before we feel like we really are making a dent? >> that i don't we really do. i don't think we need to see the kind of movement rate rises that historically we've seen, because this cycle coming out of covid was just so different than those other cycles. i disagree fundamentally with people who said, you need unemployment. >> i think jim might think differently. >> we don't need it, but we have always had it in the way of getting inflation down. financial conditions index is measured by the chicago fed have never deviated during the so-called tightening span.

money is easing, it's not tight. and i think that inflation is going to prove to be chronic, persistent, and rates will be higher for much, much, much longer. >> you could get really negative, jim, if what you're saying spirals, could you not? >> the fed insists on inflation. people forget that. people forget that the fed targets a 2% devaluation of 1s and dollars every single year. that is what they aim for. and sometimes they overshoot. >> how much higher would we have to go? in a worst-case scenario, how far off neutral or restrictive are we in your view? >> i think we're way off. are the problem also, joe -- >> 200 or 300 basis points? >> yeah, 200 basis points. but nobody -- i mean -- the business -- >> yjamie dimon -- >> it's pseudo science or social science. >> would that put us into a

recession if we go up 200 basis points? >> it probably would, and you know why welcome because of the presiding dozen years of 3% funding costs, which enables the federal government to rack up deficits of 7 to 8%, during a time with 3% unemployment. it enabled the private equity business promotion to thrive and it enabled cryptocurrencies to fl flight. some of them going to the moon. the suppression of interest rates is as important a backstory as is the prospect of rate rises, a forward story. >> seth, you should not be sleeping as nearly as well as you've been sleeping lately. >> all you need to go is in hair and makeup and they paint you. >> is that too dire? >> i think it's far, far, far too dire. >> far far -- >> okay, i'll take back one of my fares and say, it's far too dire. >> i do get uncomfortable when i'm optimistic about the world by nature, i'm pretty

pessimistic. but in terms of looking for what's going to cause the recession, i think it would have to be from my perspective a mistake by the federal reserve. i think the fundamental trends in the bulk of the inflationary components are on their way down. and so what they are trying to achieve is a balance between having inflation get back to target over time, and let's remember, their whole view has been the end of 2025 or into 2026, is when they want to get back to their target. so they haven't been in a hurry. and so for me, that's the reason why i think they're on the set, on a course to cut this year. >> things were so good like three or four months ago. soft landing. five or six cuts. the unemployment -- everything was -- there was nothing wrong. >> to be clear, people were throwing rotten garbage and stones at us when the market was pricing five, six -- >> over columbia? >> no, no, no, right there in midtown, when people were expecting the fed to cut five,

six, seven, eight times, and we were saying, no, no, no, nowhere near that. the pendulum has swung and i've been on the wrong side the whole time. >> good to have you in. thank you. when we come back, what could the post bob backish era look like at paramount? we'll talk about that, but first, as we need a break, a programming note for you. this saturday is the berkshire hathaway annual meeting. warren buffett will be taking the stage in omaha to answer shareholder questions for five hours, and you can see it all right here on cnbc. it will also be streaming on cnbc.com. that day will kick off at 9:30 a.m. eastern time. mike santoli and i will be there along with 40,000 others. they'll be joined by berkshire board members, managers, shareholder, and a few surprise guests. you will have full access to the main event, buffett on stage. of course, on stage with him, berkshire vice chair's greg able. you can tune in saturday at 9:309 eastern on cnbc and 'lbeig bk..c.

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bob backish is out at head of paramount global. the company replacing the ceo with a trio of division chiefs. this news comes as paramount is in talks with sky dance media about a possible merger. joining us is matt belloni. okay, matt, what happens? play it out for us. >> very big development. this was a surprise development over the weekend. bob backish was dismissed. he stepped down. and there's a couple of scenariscenario s here. one, this is just clearing an internal impediment to the sky dance merger, which shari redstone, the controlling shareholder, really does want to make happen. if it doesn't happen, there is a separate potential offer on the table from apollo, which backish

tended to favor, because that benefited paramount global shareholders in general, not primarily shari redstone. so there's one scenario where this is all just a placeholder until the merger or a deal can take place. the second is none of these deals work out. and they've got to figure figurs company. now they have an office of the ceo with two television leaders and one film leader who get along very well and they believe they can work together and they say they're going to put together a plan to run this company. >> we were talking about that earlier. rich pointed out with the three of us onset together, and we were talking about how insane it would be to have all three of us -- >> do anything together. >> call the shots. >> it's one thing for these guys to have a text message chain and they communicate. it's quite another thing to

direct the strategy, even in its diminished state is a significant entity with lots of different arms and agendas. brian robbins is relatively new in this role as the head of the film studio. george cheeks and chris mccarthy are veteran television executives. they've never been in this top role before. they did present to the board this past weekend, and apparently the board liked what they heard. but it's going to be really tough. we'll see what happens if they can't make any of these sale deals happen. >> green field's point earlier when he talked with us is, look, this is the controlling shareholder, shari redstone. you knew what you were getting into when you got into this company, there was a super voter that would be in charge of innings. i don't think that means the shareholder lawsuits will drop away easily. what happens? >> no.

we do know shari redstone camp is pretty confident if there are shareholder lawsuits that this marger with skydance would survive them. clearly skydance is cognizant of them because it upped the offer and added $3 billion toe the mix that they hope would improve the balance sheet and sweeten the deal for some of these class b shareholders. we'll see if that's enough to make them feel okay with this. the special committee at paramount is evaluating this, and obviously they've had some issues there, too, where several board members have stepped down from this committee during this process. we don't exactly know why. but that's usually not a positive sign. >> matt, just final thought. your best guess as to whether this deal goes through or something else gets pushed? >> i still think the skydance merger happens.

david ellison's father, larry, is one of the richest men in the world. i do know the skydance people are getting frustrated by this process. they don't like the leaks to the media. think think it's become kind of a circus. the deadline is may 3rd. if there's no extension here, we can see resolution on this happening or not happening by the end of the week. >> okay. matt, thank you. matt bellamy. coming up, takeaways on this morning's big pharma earnings. we'll speak thwi a top eli lilly analyst after a break. "squawk box" coming right back.

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can affect that as well. >> joining us is a rater of lilly with overweight with an $815 price target. you can't call anything overweight when we're talking about lilly given these drugs. help us understand what you thought of these results and how much farther it goes. >> i think the results were great. even though there was a modest miss due to short tanks due to manufacturing, capacity supply constraints. zepbound beat big, and first quarter a quarter. also, they're investing in the future, positioned in the right areas. orals, amylin, combination products as well. two products they might get

approved, one for atopic dermatitis and one for alzheimer's disease. >> how much of this stock do you think is priced for perfection? what happens, for example, if one of these oral drugs for weight loss isn't approved of takes years to get to the promised land. >> that's always a risk. lilly is currently priced for perfection. what people are missing, for anybody else to get in, there's two players, lilly and novo. we've seeing that they spent spent billions manufacturing and won't get to be able to supply the market until next year. so far the oral data has looked positive. i'm optimistic about the future for the company. >> is this now, when you look at

lilly, is this a one-drug company, a three-drug company? at one point you would have thought of this as a diversified drugmaker. now you might not think about it like that. >> that's a great question. i do think it is a multi-diversified drugmaker. still a lot of assets in the pipeline that people give them no credit for. they have an ap little a product which has a lot of growth potential. some of the next wave of obesity drugs that will move them away from just glp-1s and they have alz which i think has fallen by the wayside and people haven't paid attention to. it could be interesting for them going forward. >> louise, thank you for your perspective on this stock moving higher on the news today. take a quick final check on the markets this morning. dow jones, still about a half hour to go before the market opens. 176 points down, nasdaq off 78 points, s&p 500 off about 21 points.

treasuries real quick as well, 4.665. now the two-year is over five, just over five. >> another hot number. >> and a lot to chew on. join us tomorrow, we've got a lot more news. >> we don't know what it is yet. >> "squawk on the street" begins right now. good tuesday morning. welcome to "squawk on the street." i'm carl quintailla with gem cramer and david frazer from the new york stock exchange. futures are weak as employment costs come in hot. ten-year 4.67. mcdonald's, 3m, comb all on the move post results. >> another big name the watch is eli lilly, posting that profit beat, hiking the full-year guidance by $2 billion. elonis