you'll be here monday? >> yeah, well, i'll be here monday. we'll be on the show again, but we're here tomorrow too. tune in, 9:30 a.m. eastern time tomorrow. >> you'll be there still on monday. okay. make sure you join us next week. "squawk on the street" is next. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. futures are soaring as the market welcomes this miss on april jobs. 175,000, some negative revisions, wages run cool. ten-year is back below 4 pnlt 5%, and that's where our road map begins, stocks roaring on the less than expected number. unemployment rises a tick. plus apple is posting a double-digit drop in iphone sales, but it did approve that $110 billion buyback. that's the most ever for a public company, and it is giving the stock a boost in the

premarket. the price for paramount. sony and apollo submitting a cash offer. that includes debt. i will bring you up to date with the very latest reporting on this saga. let's get the market reaction to this morning's job numbers. we were looking for 240. negative revisions of about 22,000. bond market kind of sniffed this one out, jim. >> it did. this is one of those moments where i think you're sitting there and saying, well, think about the narrative we had on tuesday, that tomorrow, powell's going to lower the boom and talk about how, yeah, the chances are we could have a rate hike. he would have looked very foolish. instead, now people are saying, did he have the number? no, it was a pretty tightly kept secret, but when i look at this, i say to myself, all right, we probably will get a rate cut if things get a little bit lighter and that the market is very poised to have a run here, which is really amazing. >> yeah, the ten-year right there tells the story, doesn't it, jim?

>> sure does. >> falling dramatically in terms of yield as it has. we were at 4.7% very recently. >> very positive. >> it's very positive. >> it is, because now we're -- there's not much ahead of us because we're kind of out of the big earnings period. >> yeah. >> if you can kind of coast on a lot of stocks. >> that said, we're still going to continue to have this endless conversation as to how many and when in terms of rate cuts. >> oh, yeah. >> doesn't appear that one is on the horizon in the nearest term. >> let's do this. why don't we just ban it here and do our viewers a favor and say, okay, look, we had unemployment, and we had a fed meeting, and those are the two things that really matter and now we're going to have to be like the fed and be data dependent. if there's data that's in line, we should stop squawking about it. we should not be playing the parlor game of, well, so-and-so, from the state of cleveland -- >> you've just blocked out about six hours of programming on cnbc. >> how about we try to make

people money? >> that's a novel idea. >> radical idea. i had draftkings on last night. i had brinker. i can't believe he's turned the corner. cinco de mayo is a big day for him. it's possible they could do a 35 basis point. >> how about 36.5? >> david, let me tell you about the two-year. >> tell me about that two-year. >> i'm sorry to be dissident, but i'm not solzaniza here. let's just say that the two big numbers are unemployment and the fed and the that let's not get confused. we're in a moment where we have now had the two big bad events, and let's just take a look. we should try to, at least, make sense of companies on the basis of earnings. i know it was impossible to do during the last three days and was very disarming because you want to make people money.

and then people -- i keep hearing people say it's a stock picker's market. that's nonsense. it's an s&p driven by fed market era, and i think, within that era, there's -- it's very hard to pick stocks. >> yep. >> your whole work could have been undone even in apple if we'd gotten the wrong number. look at amazon. they reported a great number, but they were in the maelstrom of fed day, and we didn't find out how good the reaction was until after. now, amazon can run another five. this is not paramount global. >> oh, don't worry. we'll get to that. >> i'm just trying to say -- look, am i trying to dis coverage? no, i'm saying there are times when there is a game and there are times when there's chatter about a game, and i'm saying the chatter about the game is not that meaningful. >> well, if rates stay calm, doesn't that lower the bar for earnings? it's not going to have to carry as much water? >> exactly. so, what i can do is say, that alphabet quarter was so good, i

think it might be worth 10% for the stock. i won't say this, that alphabet quarter was really good but i don't know what the fed is going to say. is it us doing the thumb-sucking? no. if jay powell is going to continue to have these moronic conferences where he subjects himself to this lunacy of questions -- >> you're referring to questions. >> the questions were, aren't you worried? >> moronic conferences where he subjects himself to the lunacy of these questions. >> you've not been a fan of the fed press corps. >> he continues to do it. can you just drop it? >> he can do whatever he want. he's the fed chief. i just think he doesn't do himself any favors and they ought to have a blackout period -- >> all right. what about jobs? anything in the jobs report? unemployment rate is now 3.9%. >> it is very interesting where the job growth was. i mean, we're back in seeing health care really strong. remember when health care was really strong, and we knew that health care was going to cost us more money? that's the number.

what did happen this week? we saw cvs have to pay too much for health care. we saw walmart write off a gigantic initiative. we are back in the world where health insurance costs too much. >> yes. >> that is very meaningful. that's what i'm focused on. >> all state, another one, right, on the insurance front. >> we talked about car insurance as well. auto insurance. >> you want to worry. the other day, i said, look, maybe we should have a commission looking into things that have just not come down so that we can say, look, this -- these are the industries we're most concerned about. i don't want a witch hunt. i just think there's an element that's intractable, and i would like to know which -- the american people would like to know. >> i'd like to know why my auto insurance went up. i don't know what the increase was that geico did. it was incredible. >> they're not focused on that. they're focused on handbags. >> you mean the ftc? >> i've spent some time on the handbag issue, and people are going to canal street.

they got all sorts of kate spade there. >> they're beautiful. i know those handbags on canal streetlight or even broadway in the high 40s. you can find them. lovely assortment on the sidewalk. >> you have to at least figure it out so that consumers pay less. at the same time, you have everyday low prices at amazon, but they don't like amazon. i mean, i want to know what's causing this. now, you can call the heads of toll brothers, and you can't call kb homes and pulte and say, why don't you build more homes? shelter and insurance must come down. let's move to apple this morning, up sharply in the premarket with the beat, the year over year decline in revenue. china, down 8% is better than down 13% in the prior quarter. >> the big thing here, i feel like i'm really -- i really am this morning -- the second thing

no one's talking about is that the vision pro, not only being a bust, it's going to be very big business to business. when i spoke to tim cook act about it last night, it's very clear that the orders that are going to come in from business to business in order to build things, to make things, siemens, auto company, this may be one of the biggest things they've ever had, but it's not talked about because people think it's just something to be on an airplane with. >> so he agreed with you. >> this is the omniverse. this is what nvidia's been talking about behind the scenes. it's a very important -- not mentioned by a single analyst, by the way. not a single analyst talked about the thing tim cook said was very important for me, which is the business to business aspects of what is going to happen with vision pro. it's so great to build a factory using vision pro. >> seems like a blip on the radar, given the focus on handsets and what that's going to mean and the next iteration

of the iphone and the inclusion of a.i. i know you care about this vision pro thing, but it's not going to move the needle for a while, jim. >> you're wrong. >> i'm wrong? okay. all right. >> you're wrong. it's the biggest thing that could happen in business that they have had. yes, absolutely, a.i. is going to be very important, and the they're going to talk about a.i. developers onference, but when you talk to nvidia, they say, this is the big blackwell use, omniverse to vision pro. i hear everything you said about apple, but what i'm talking about is jensen huang and what he thinks can happen. >> okay. >> and what tim cook didn't do last night was throw cold water on it, which is what i was worried about because i'm out there on this thing. >> you are, you are. >> but i think that everyone -- they've sold out of what they have. they didn't build new ones and i think a.i. is incredibly important. i'm just trying to add to the

conversation. >> you're trying to add this is something that may be overlooked. >> i read every piece of research this morning, and there's not mention of vision pro, and yet when i spoke with tim cook, he's jazzed about vision pro. >> there are a few target raises. jpm, rosenblatt. the buyback, jim, 110 is the biggest ever. it's bigger than most s&p market caps, the on the list of all-time record buybacks, apple has the top six. >> well, the fantastic cfo is trying to run it at cash neutral. they have so much cash. >> so much. they have $162 billion in cash, marketable securities. $105 billion in debt. they've got $58 billion of net cash. >> right. this is a surprise for them. they have too much cash. they'll be in there buying. they're in there buying all the time. i think that where people -- the two things people got wrong was, one, the growth for in quarter. but the second was, like, and tim's kind of a, i think, a

little shocked that there are all these surveys that talked about how china got worse, worse, worse, when china got better, better, better, so i think what tim is saying is that the surveys are -- just don't do a good job and maybe you shouldn't rely on them as much as people do. >> no, but it is clear that huawei has an entrant in the marketplace that has taken share in a significant way. >> it's also true that -- who knew they were doing as well as they were, apple in china? remember, the government, which happens to be a totalitarian government, wants you to buy huawei, and yet people are still risking -- well, let's just say the aprobrium of government. when you talk to tim, i mean, by the way, like, you talk to tim cook, he's a very real person, and i don't mean to sound dopey about it. what i'm saying is that he, too, gets surprised when things are good. like, wow, china turned out to be better than i thought.

we started thinking that maybe china was getting weaker, and it didn't, and the big cities, we're selling really well. i mean, they're trying to do a rest of world where you -- with the conference call, you talk about how big india can be. now they're talking about -- soon, the conversation would be about r.o.w., rest of world, and it's also going to be about the wallet. that's going to be really important. we don't know where the wallet's going, but they intend to be much more financial services oriented. that matters to me. more financial services, more business, but then the a.i. the guy said, listen, do i have to go over all the things that samsung's doing or just forget about it? i got the impression that you can forget about the lead that the android phone has. that will be history three months from now. there will be no lead by the other guy. >> we do have an ipad event coming up in a few days. it's been a year and a half since that refresh, jim. and ipads were down 17. >> and they -- that -- when you look at that, that's important, but i thought it was very interesting. this quarter, if you added up

mac, ipad, and you added up ear and watch, service is bigger. >> services. >> services, gigantic now. you really have something where if you wanted to extrapolate and be someone who's incredibly bullish about the service, you could see service becoming half the company within a few years. >> as we pointed out, of course, that is deserving, at least in the view of investors, of a higher multiple, given the recurring nature of that revenue as opposed to being in the market with a new iphone, and you never know. >> right. maybe you give that a colgate multiple, and suddenly you realize the multiple is not -- k colgate is -- >> kcolgate is having a good year. >> like baby ruth versus calvin c coolidge. absolutely. i'm trying to analogize. you've had it in for me the whole week. >> that's not true. i love you like always. it's just this vision pro thing, i don't know.

>> when we come back, david will get us the latest on paramount, including a bunch of movers today. we'll get to expedia, booking, livenation, xpo, look ahead to berkshire. n-artis holding in there. teye sll below 4.5% and the vix, under 14. to the roots of our legacy. where excellence, comfort, and electricity... are forever in bloom. welcome to beyond. the mercedes-maybach eqs suv.

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♪ all right, and it just keeps getting more interesting on paramount. let's give you the latest at this very moment with the idea being things can always change. of course, tonight, you have the expiration of skydance's exclusivity period of negotiation that it has been involved in over the last 30 days and which is trying to get to the finish line on this complex deal to take control of

paramount. they didn't quite get there, as i indicated earlier this week, skydance, the ellison group, along with its partners, redbird, had been asked for a certain number, and certain considerations. they felt like they met that only to sort of still find that there was a gap, which they haven't addressed, and then, yesterday, we got news that, of course, i can confirm and give you more details on, that sony and apollo have submitted a bid for paramount as well. it's nonbinding, so to speak. it's an indication of interest, but it is very different, according to people familiar with the situation, than the previous letter that was received some time back from apollo. same number, $26 billion. remember, we're talking about almost $15 billion in debt, so don't get overly excited and take $26 billion and divide it by the paramount shares outstanding. it includes debt.

but it is what i am told is a very serious offer being taken quite seriously by the special committee that, of course, is running this entire process, special committee of paramount's board, and is going to be pursued as such. tonight at midnight, in all likelihood, fully expect the expiration of the -- of that period will -- of the exclusivity period will come, and the special committee will undertake negotiations, still with ellison if they want to keep going, but with sony and apollo. that deal is not without its own serious considerations. by the way, price-wise, we -- and i'm being told, significant premium. for the b-holders and a double premium, so to speak, for shari redstone and for the a-shareholders. not quite certain where that comes from because "significant" can mean different things.

i've heard as much as 40%. don't jump to conclusions. maybe you get to the high teens. i don't know. it does not include, as i'm told at this point, though it is considered quite serious, this bid, things like a reverse break fee that would account for some of the risks taken on in the 12 to 15 months that any sony or apollo deal would take to get approval from the antitrust authorities, the federal communications commission, it's a foreign buyer in japan. there are stations that apollo owns, so even though they already have fcc clearances, you know, would they be able to continue to increase in the station front? so, any number of complexity around that as well. but jim, that's kind of where we stand right now. sony, apollo, now, again, and i want to stress this, very different. night and day is what i'm hearing from what was that previous indication of interest from apollo alone. in this case, obviously, sony would be the larger investor in a purchase of all of paramount

and then integrating the steed studio with sony. apollo owns legendary. then you're off to the races. will it happen? that remains unclear. will ellison and redbird come back yet again and try to mound something that meets whatever the hopes were for the special committee? also unclear. >> all right, so, what do they see? we have every single day stories about linear not doing well. we know from when we talk about the nba the rights for things are out of control, and it's really only the amazons of the world that won't get their balance sheet. >> yep. >> we don't have any sense about any change in ord-cutting. >> yep. >> so, what do they see now that they want this? >> it's a great question. let me -- i'm looking through my analyst notes here just to find what i think is the right thing. listen, if you are sony, for example, you're going to have an enormous opportunity to save

costs. i mean, you've got a very valuable tv library. you've got some ip, but not as much, because frankly, skydance owns some of the more important ip in "mission: impossible" and maverick, but you've got a library of great value in tv. you've got an opportunity to save enormous costs because, frankly, you can lay off a lot of people. how that plays is yet another consideration. >> so, strategically, this is a -- one of the few where it actually might be 2+2 is five. >> yes. >>might be. >> you would hope to save as much as 1 .5 to $2 billion, straighten things out on the streaming front, whatever that may mean, and then you're off to the races, potentially. it's such a challenged industry. those kinds of questions are certainly the key ones, jim. >> great reporting. we'll get cramer's "mad dash," countdown to the opening bell. one more look at the premarket as futures, willing to accept this miss in jobs. 175 if you missed it, below consensus of 240. stay with us.

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finishing out this week on a high note. opening bell is coming up in about four minutes. don't gonyer awhe.

let's get to a "mad dash." we want to talk a little amgen and may want to talk a little bit more because the stock is going to be up sharply. >> when i met with bob at the beginning of the year, he said, look out, we got something that might be better than glp-1s. they just passed phase two. phase three is a very difficult phase and because this is a different medicine, they're not going to prove it immediately because they say, oh, we already have something on the market. however, if they do succeed, it would be very big because it does last a little longer. >> it does? >> it does. >> it's an injection now. they've given up on oral. you do have novo and eli lilly in this market in a significant way. >> it's more like cholesterol. turns out, you have a lot of companies that do it and they still make money. i think amgen should have been up, and remember, amgen was up in january when they said this, and then we got the numbers and

eli lilly turned out to be doing really well. let lilly come down and buy a bundle. >> jim, let's get the opening bell here. at the big board, it is the consulate general of mexico in new york. cinco de mayo is this sunday. at the nasdaq, it's the committee to protect journalists. speak of amgen. that's going to be the lion's share of the dow. >>mgen is a great company, and bradway is a serious executive. they have an anti-cholesterol drug that's still not getting its due. they have a terrific migraine drug that is not getting its due. and all i can tell you is that they're a juggernaut that people don't think is a juggernaut, and their dow stock that everyone was unexcited about, but they and pfizer are the two drug stocks that are suddenly in the conversation again. and i think it's important to

point out that pfizer may have some momentum too. >> yeah, huge weight in the dow, even before the jobs number was going to account for a couple hundred points of gain. >> sure, and obviously, the treasurys are signaling there's got to be s&p buying, and david, there were -- when we look at what happened with the megacaps, i mean, we know that alphabet was really good. we know that amazon was really good, and we know that apple is good, and that's just -- microsoft was great. so, you have money going back to those in a slowing economy, which is apparently what we're getting, you buy those. there we go. >> apple's gains are significant as you see there. paring its losses to under 4%. when you mention meta, alphabet, nvidia, microsoft lags in terms of its performance this year, which is basically in line with the s&p. >> i'm glad you brought it up, because their conference call, particularly amy hood's portion, was extraordinarily good. they had nothing bad to say.

i think what's happened is that their chat is beingdiluted. now people think that what google has is very good. >> so, with gemini, you ean? terms of competing -- >> this meta product is really great. i'm on it every day. >> what product are you referring to? >> go to whatsapp and call it up. it's so good. i mean, here, let me give you an example. i'll see that cloudflare is down, is i'll say, is cloudflare losing share? they'll point which ones are better and give you the pluses and negatives, and it's really coherent, very fast, fabulous. >> that's on whatsapp. that's a meta product and you're using it. >> remember, zuckerberg brought 300,000 of the gpus from nvidia, and you see what it's for. and yet, when i talk about it, no one else is on it other than me, and i was a claude iii guy. i happen to like claude iii very much, which is anthropic. >> amazon's the being investor there. >> i'm now using the meta product more than anybody

else's. i like these because i don't want to go to an interview and think there's something i'm missing, so you're interviewing brinker, put in, is there anything new with brinker? >> i think it was bancel from moderna where 60% of workers there are using chatgpt or some variation of a.i. >> i don't know how you don't use it. i don't know how you feel prepared enough to look at a company without going -- without putting it through the box. i just don't. when you want to have a comparison of a company or companies, it has every great trade publication comes down immediately and say, okay, i'll read what this trade -- which i never even knew. i'll read the side-by-side, and it helps you make a conclusion. that's what people do. it helps you make a conclusion. and meta's is very -- i went to zuckerberg and said, listen, we ought to talk about this thing. >> i mean, listen, it's been a while since we talked a.i. in a more significant way, given the avalanche of earnings, but blackwell is coming and the

increase in power of that -- >> i mean, how much it uses or what it's going to do. >> not how much power. sorry. i'm saying the multiples of what that is versus now in terms of the compute. >> right. >> it's shocking. >> yes. and one of the reasons i keep mentioning -- i'm afraid to mention vision pro, because i'm afraid you'll -- >> okay. i'm done. >> -- turn me into krusty or bozo or any of the variations. you use the omniverse as powered by blackwell, and that goes into vision pro, but it wouldn't work otherwise, because blackwell is so much faster. i wanted to recommend getty imaging. it's too small. they're feeding all these images and movies into the database. that's what -- you understand that video had eluded -- had really eluded them. they were really text. not anymore. so, they can put in every kind of movie ever made, every still

ever made, and this is how you get to have lincoln give the gettysburg address after you've watched, i don't know, a program about getting -- manhunt. i want to see lincoln give an address. with blackwell, i can have that right in my room. i can have anybody. >> blackwell has yet to -- >> it doesn't ship until the end of the year. i'm sure amazon will get it in september. everyone's very excited about it, but remember, everyone's a little tired of nvidia being the state of the narrative. >> right. >> they want -- like if you go to amazon's conference call, which was excellent, by the way, they're talking about their different chips, but then, of course, they throw in that, yeah, we have to -- we are on the good side of nvidia. >> well, the narrative today, jim's, largely about things that are financed. the home builders putting together gains. sherwin williams, home depot. >> so glad you mentioned that, because what's happened is those stocks have been horrendous because people were getting the

notion that there's going to be, you know, higher for longer, so the home builders have been bad, and the companies that have been terrible are companies like floor and decor, which is a very good company. i love to mention companies that david has never heard of or is interested in ever. it has to do with floor and decor. >> okay. got it. >> masko is -- one that is, i think -- look, there's some -- home depot and lowe's. >> what about home depot and lowe's? >> well, thecy have been te terrible, and they might be good. >> because rates are falling and then -- right. okay. >> they're so rate sensitive. >> people are more likely to, what? to move or to undertake -- >> so, moving -- >> diy in their homes? >> moving could be more prevalent. that's what you really need to see more people go home depot and lowe's. >> floor was a double miss. ir is down about 5%, jim. >> you know, you started getting

some weakness in anything. >> floor & decor. >> new roads. people who are downgrade, vmc, i think that sherwin williams did not have a great quarter. >> there's fluor corp. that's water filtration. ir is down. >> sherwin williams. >> you're moving too fast. get back to ingersoll rand. >> sherwin williams had been down badly. >> how about xpo? earnings up 45%. tonnage up three shipments per day at five. >> well, i mean, they have -- they have had really good transport numbers and that thing had been going down because of the higher for longer has hurt transports. i don't know if you heard becky's great interview with the ceo of burlington northern. >> we got an upgrade of unp

today. >> unp is doing precision railroad, and it's really paying off. i also think that this is a case where you can look, point by point, about everything that goes into a home and it's pretty darn good today. >> what is? >> homes. >> homes. you like it? you like homes? >> yeah, i do. >> mahomes? >> i like mahomes. >> who doesn't like mahomes? >> it's hard not to like but i kadarius toney did not fare well in that department. you know what he didn't do? he didn't bet on games. draftkings turned in -- they turned him in to the authorities, which i thought was so -- >> now we're talking about the nba player? >> if you're betting on your own game, betting on any game, they nail you for that, but

draftkings is a stock that should go up. >> the nba has been particularly enjoyable. particularly last evening was quite fun. >> that hurts. he has had it in for you all week, you're right. >> all week. i mean, like, what else? >> josh hart. >> brunson. >> oh, brunson, he's -- >> villanova's own. >> the three villanova guys. they scored or assisted on almost all of the 118 points. >> i'm so glad. did you narrate that game at your home? did you look in the mirror and say, oh, look at that shot. holy cow. did you do that stuff? >> from downtown! >> i usually do my best clyde fraser. hellacious and salacious. >> i wish that doris burke would replace you right now. i want doris burke right now. >> here, next to you? >> yes. please. today's the day where i say, could you replace david for one game. >> she would have the same

questions. >> the single best announcer in the world. >> jim, i don't understand the vision pro. >> he hasn't hit me on estee lauder today. >> we got, actually, it was -- >> is it hot in here? >> i cannot take it anymore downgrade. please. that guy's drowning in, like, mac. >> jim, all week long, we have been talking about industries where one company ease on the sunny side of the street, the other side, shady. this expedia/bookings split today is a good example. >> the expedia call was a disaster. they were saying, our vrbo application didn't work. expedia's conversation, it is nothing like booking's, which was very good. booking talked about traffic and where things are -- if you came out the latest -- the earliest you came out of covid is now recycling and they're no longer traveling the way they were. but the glitch that happened at expedia was not related to

travel. it was related to their own internal bungling. >> meantime, booking holdings was a beat. they did not raise their guidance. they said they want to wait a bit. >> they're worried about the mideast. they were more sensitive to the mideast than almost anybody because april is turning into a month that people are worried about, but booking's was a fantastic quarter. t they are a great company. holy cow. >> berkshire's big meeting this weekend. monday, we'll be running excerpts from what i assume would be the interview with warren. becky had some great interviews this morning. always worth taking a look at berkshire. it is one of the -- it's the top, i don't know, six or seven at this point. it's got an $870 billion market value. by the way, owns $160 billion worth of apple. >> right. that was a great buy. >> a great buy back in the 2016-2017. >> coca-cola.

the portfolio -- >> and an enormous cash position that he has yet to actually -- he's getting a return on, thanks to interest rates, but has not -- >> bank of america. >> -- has not bought something with. >> you're right. it's big enough that we should be spending more time on it. >> that is not a bad chart. that is not a bad chart. >> no, it isn't. they don't tell you a lot. >> that is the greatest investor of all time right there. >> absolutely. well, you know what -- >> he's the g.o.a.t. >> he's the g.o.a.t. >> own the stock. he is the g.o.a.t. but is there a "30 for 30" about him? no. >> i don't know why that was funny. i don't even know why. the way your brain works, i'm like, what? >> well, boeing hasn't done anything bad in the -- >> there's a piece in baron's about the second whistle-blower to die in recent weeks, jim.

we didn't touch on the ftc pxd story about whether or not they will recommend a criminal probe of scott sheffield. >> that deal's closing, by the way. i think it's close. >> i reached out to some of my sources because i want to defend him but you didn't defend a guy without knowing more. he's taught me more about oil than almost anybody in the world, and that doesn't mean -- i mean, i need ammo. i can't just say, listen, they're wrong. you got to know. they have so many emails. obviously, there's something going on. you can talk to darren woods. >> i guess. i mean, they claim it's being misunderstood by the ftc, but they said, okay, sheffield said, all right, i won't be on the board of the combined company. going to be talking to darren on monday, by the way, from milken, and we'll certainly talk about that. we'll continue to, as well, talk about, as i brought up any number of times, this sort of unique dispute that they're in about that joint operating agreement in guyana, in which they're saying they have a right of first refusal. >> is that your lineup? >> that's my lineup, yeah.

>> mnuchin's my guy. solomon's my guy. so, those are two -- i've got the two kings. you've got a 7, 9, and a 3 you've got there. >> trying to move it in different directions. day one will be good, though. marc rowan is always great to talk to. >> are you going to ask about colleges? >> he's been so involved. i think it would be hard not to discuss some of the campus protests with him. but there's never enough time for marc rowan. >> marc rowan is fantastic. >> not to mention david solomon. >> and david, yeah. >> strong earnings at goldman-sachs. he's got to be feeling decent about things. >> yes, definitely. by the way, magnificent seven is having a great day. well, at least, microsoft. >> sure is. >> well, actually, coin had some premarket gains, jim, but relatively flat now. the one i was thinking of was block with dorsey rolling out new plans for bitcoin. >> there's two elements to block last night. there's the dorsey rollout of -- which it talks about, so much about bitcoin, and by the way, they don't care for ethereum.

but then there was just, you know, talking about the plain old business of the app. and it was really terrific. and i think the stock should go much higher. i thought that was a really, really good conference call and they're doing a lot of business. >> livenation, we haven't touched on with a nice beat. they don't think justice will pursue a break-up. concerts were a little light. >> i got to -- i'm not sure -- look, i think rapinoe is terrific. i think the game against the justice department here is a bad idea. you don't want to game the justice department, because the justice department, like the ftc, david, we have kind of a activist justice department. >> yes, we do. >> ticketmaster. i'm not sure they like it. >> there were a lot of questions as to whether that should have been allowed in the first place, but now they're coming after it many years later. >> they're trying to make up for a lot of things that others have checked off on, other administrations. when you talk to justice, i mean, justice is -- look, ftc

and justice, very much aligned on a lot of things, but carl, one of the things they're really aligned on is the consumer and small business has been hurt by all the big deals. >> you know, we haven't mentioned the closing arguments took place in the google antitrust trial. >> yeah, because it wasn't -- >> it's going to be a while until the judge rules. >> it's not the big one. >> no, it's not, but it's not unimportant. >> no, it's not unimportant at all. and i want to see the tenor of the judiciary does not necessarily agree with the different organizations. >> there's another doj headline on something we've covered. there's the judge i'm talking about, of course, closing arguments there. asked a lot of questions on both sides, relying on the reporting of others there in terms of what took place in the courtroom. jonlt jonathan kanter was there from doj. >> very good guy very smart. banks banks downs. they like higher for longer. with jpmorgan, easy to tell that

they -- the banks have been adamant that higher for longer is fine for us, so if we get not higher for longer, then people say, okay, well, they didn't think that's that good. i'm surprised that alphabet isn't up more, given the fact that the cohort that it's in is doing well. >> finally, we didn't -- some of the comps, the organic numbers on hershey were interesting, just given what the commodity's done. >> we got to get a handle on how much they locked in, because man, they're going to have a good year next year. i think that stock should be bought. michelle buck is a very good ceo. i thought mondelez had a really good quarter. >> meantime, more data on the way. services pmi. let's get back to rick santelli. hey, rick. >> yeah, and services pmi popped the ten-year back above 4.5%. these are april final. we take the mid-month read and toss it. 50.9 now becomes 51.3 on the services. that's still the weakest level, actually, since november of '23, but it is the tenth consecutive month above 50. lot of differences between

services and manufacturing. if we take the composite, it was at 50.9 mid-month, moves up to 51.3, same as the services. that's the weakest since december, but it still remains 15th consecutive month above 50. and as we sit here at 4.78, we're down 21 basis points on a two-year and on the ten-year, which just popped up briefly above 4.5% at 4.49%. it's down 17 basis points on the week. we still have more data at the top of the hour. ism, services. "squawk on the street" will return after a short break.

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it's time for jim and stop trading. >> once i would lake any way airbnb, i think chesky is doing a terrific job, brian, but on the expedia call last night the problem is vrbo. they had a glitch and the natural winner if you were looking at vrbo is to go to airbnb. they were off-line for enough for me to think airbnb is going to have an upsize surprise. i would buy that stock and not recommend if it weren't doing well. >> so many mixed signals in travel. the warning out of the european car rental company. >> it's confusing now, but if you are frugal traveler, you will go with the bookings and airbnb, it's cheaper than a hotel. >> how will you close out. >> generac which is an interesting company, we're seeing we're no longer getting the big money put in the climate change to stop it, and it's

going to security, the government, but generac is a way, if you think that your utility company doesn't do well when it gets hot because the grid is so bad, generac is there. >> you get more storms that are more powerful that come through and knock out your electricity for any period of time you're not a denier. i'm glad. you and i can agree there is climate change going on. >> yes. >> there's the melting. >> i'm not a denier. >> you're not? >> no. >> i thought that, you know -- because i said that i'm -- i'm worried about climate change -- >> it's not going to matter when ai kills us all. that's david's point. >> or put our visionpros on and see what world was once like, as we're in our cradles allah the matrix living our lives that don't exist. >> like contour -- >> sneakers and jeans my friends. >> brooks. >> they were on today. >> that's why i mentioned it.

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♪ good friday morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla and david faber, live as always from post nine of the new york stock exchange. rally day on wall street today. dow is up more than 500 points. s&p surging now 1.5%. the nasdaq in the lead up 2.3%. every sector in the s&p 500 is higher right now. information technology is leading with a 3% rise there. energy is lagging, but has turned positive on the day. reaction to what is being called a goldilocks jobs report. we'll get into it. take a look at treasuries which tells you the story they're getting bid and yields lower

4.5% on the 10-year. the 2-year down to 4.785. it was over 5% this week. the dollar is weaker. a market friendly reaction. 30 minutes into trade percent starting with apple, one of the biggest gainers post results and we'll break down the results and comments from ceo tim cook in just a moment. amgen shares are surging, announcing plans in favor of moving forward with its injectable drug similar to wegovy. the company will release initial data from a mid stage trial on that drug, but it's pleased with the results so far. travels name bookings, holdings, expedia heading in opposite directions. ceos calling demand healthy on their conference calls. >> to ism services to close out this week. rick santelli has got it. hey, rick. >> yeah. there's a tug of war going on in these numbers. these are from ism versus s&p

global and they're also the service side. if we look at the headline it dipped back below 50. it's 49.4. we haven't been under 50 since december of '22 and that's where we come to because that was 49.0. if we look at prices paid, the exact opposite scenario, moving higher. 59.2. now granted it only comes to january of this year when it's 64 but in the interim period we were lower. lowest of the year last month's read at 53.4 the weakest, going all the way back to 2016 to find a weaker number than that. yes, this was a big deal. now if we look at ism services employment after we just had the big employment report, it comes in lighter at 45.9 kind of in correlation with that number, 45.9. that look the weakest back to december of last year.

and finally the new orders component, expected to be around 55. last look 54.4. drops down to 52.2. that would be the weakest going back to 52.2. you have to go back a ways. that's the weakest since december of '22 when it was 45.0. it's been running on the strong side. of course, even though it's above 50 in expansion mode it's weaker than we've seen in years. sara, back to you. >> okay. thank you very much. feeling maybe that what we've been seeing post jobs, rick santelli. let's talk about what we got on the jobs front, 175,000 jobs added in the month was good, but slower than it's been and that's what market wants to see. it's what fed wants to see. so it was the smallest job gain in six months. one thing that's good. it still shows there's job gains. why did that happen? well, actually, if you strip out the internals here, i really wanted to show the health care

and private education sector combined added up to almost half of the job gains which shows you it was the softer report than expected an the cyclical parts of the economy, but it was broad based in terms of where the jobs were. leisure and hospitality adding 5,000 gains was notable because that's been one of the biggest job creators, adding ten times that in the last few months. notable slowdown. the average hourly earnings, this is what fed is going to care about most because they're trying to target inflation and bring it down. wages feed into services, so the change on average hourly earnings a surprisingly low 0.2% month over month gain. expectation was for 0.3. some of the banks were preparing us for 0.4 -- >> boa. >> given the california higher minimum wage numbers and mandate in restaurants there. the annual change in wages was

3.9%. that was below the 4% consensus and march which was unrevised and, david, the good news for the fed they would hope it wouldle filter into places like the super core inflation number, services ex-housing which has troubled them because wage costs are a big component of the services sector and so after that hot employment cost index number we got, that was for the first quarter, if we continue to see numbers like this on wages that number should come down. >> does this start to pull forward those guesses in terms of when the fed will actually cut rates? >> they're thinking maybe 50 basis points we'll get, maybe two rate cuts this year, september and december. i think it's too early to tell that because the tell is going come in the inflation numbers. but this is a god sign. it's a sign that the economy is still healthy, but the fed policy is working. i think it's important to you were coming into this week worried about two things, which the market was, rate hikes and

stagflation, this number and what we heard from the fed this week i do think goes pretty far away to alleviate those concerns. bonds are rallying, the dollar is selling off, equities are rallying and that makes sense because, by the way, japanese have got to be happy about this too, because weak dollar on this really helps their case sort of helps on the soft landing which the bull case is all about. beyond that in terms of what we're gregts companies this morning and last night as far as the economy and where we go next, it's a mixed picture. if you're in the mortgage world you're feeling the heat. mortgage rates went up for the fifth week in a row. here's what rocket mortgage says on their call. >> it's a tough market out there. you know, you've got rates that are kind of moving a little bit in the wrong direction, nba data showing mortgage applications are lower than expected. >> the only other one i'll give

you, which has been one of the stronger parts of the economy is live nation and they don't see slow down there. >> just to make sure we hit hard on the consumer demand, we are seeing no weakness. the things that we look at that give us an indications of how the shows are selling and how the fans are spending when they go to the site, all continue to be very strong. >> concerts, no demand weakness there. making it very clear that's a part of the economy doing just fine. >> experiences we talked about it. yeah. different story that we've heard so often from the clips we've shared over the course of the week in terms of the consumer, but not when it comes to experiences. >> no. but, you know, you are -- it's enough weakness in the low income consumer and sort of permeating across the consumer given the high inflation and high rates where the fed can look at the anecdotes for earnings season and say it makes sense there's less demand for

labor and the consumer is starting to feel strained, as they move towards this elusive rate cut. >> apple sit higher after announcing the largest share buyback in history although iphone sales did slide. steve joins us with a breakdown in the next few weeks. >> that's right. looking back to what happened yesterday, revenue for apple down 4% in the waquarter, iphon sales down, who cares. apple gave its shareholders the biggest buyback in history, $110 billion, increased the dividend to 25 cents and guided towards modest growth for the june quarter. that was slightly unexpected as analysts had been trimming their june quarter system in recent weeks. also ease something fears around china. china sales were down 8%. than an improvement quarter over quarter from 13% in the december quarter. ceo tim cook telling me in an interview yesterday iphone sales

in mainland china grew, countering the narrative we've been hearing. i asked about his recent visit to china, and he told me, quote, i feel great that in an extraordinary competitive environment that we grew iphone sales in mainland china last quarter and may come as a surprise to some people and i feel good about china and think more about the long term than the next week or so. the services business appears to be pretty much over its post-pandemic slump beating expectations $23.9 billion in sales, up 14% from the year ago quarter. the cfo said on the earnings call to expect similar growth in services for the june quarter and as for ai, really not much material there to share. i tried to squeeze some fresh details out of cook, and he wouldn't budge, but he did tease again and again that announcement on generative ai soon which are expecting at wwdc on june 10th out there in

cupertino. >> a lot of teasing going on. we'll have to wait a few more weeks to get a little bit more. thanks. steve covac on apple. our next guest does underscore the significance of iphone demand slowly turning the corner in china and awaits the drug world moment when apple unveils its ai strategy in june. one of his top picks, dan ives joins us at post nine. outperform target of 250. happy friday. >> great to be here. >> overall thoughts on china. >> back was against the wall. china came in much less bad i'll call it than anyone feared. we started to see a turnaround in march going into april. now granted these are not phenomenal numbers, but now you're on the trajectory. you see growth again in china. i think it comes down when you bet against cook and coup no you've been proven wrong again and again this is another quarter they came through. >> plus signs in china this year? >> i think in september you start to get growth in china and

this leads to what i believe, not just from an ai perspective, next six, nine months, it's going to mean ai driven super cycle with iphone 16. you'll get china 230 million iphones, 70% of them have not upgraded in the last three years. >> but it's limited growth, isn't it, dan, overall? >> yeah. i think for this quarter, of course limited growth. but i think when you look at the next 6, 9, 12 months, that renaissance of growth is coming back to coup tino combined with the ai story. to me, when you look out it's a time i believe it's just the beginning of the flex phase of the growth story for apple. the most important thing in this quarter given the doomsday about china being down 12, 15, 18%, it's not -- you're starting to see a turn and that's why cook, 10% politician, 90% ceo. >> how important is june 10th and that announcement going to

be? put it in perspective of highly anticipated moments from apple? >> it's the super bowl for apple. if i look back to the last four, five years, it's probably the most important moment because as we have talked on the show, this is really ai coming to cupertino, showing not just on what i believe will be on the iphones and the exclusive features, but about the developers, services, that's the rock of gibraltar for apple and this is going to be historical moment, not just for apple but showing that ai is coming to the consumer led by the $2.2 billion ios devices. >> dan, the capex numbers from the other mega cap tech players are just mind boggling. we don't really know exactly what apple spends, do we, when it comes to ai, generative ai? do we have a sense to what they're doing? >> we believe it's going to be up 40 to 50% in terms of ai

capex this year. because i think apple recognizes and cook has talked about it, behind, you know, competitors, you saw the ev initiative that they ripped the band-aid off and now it's all deep end of the pool on ai. that's the right strategy because we believe when this is all said and done, it could add 40, $50 per share to the story in terms of services that could be an incremental 8 to $10 billion in what will drive the ai driven super cycle with ai, the china story, just the start of that turnaround. i think it's going to be a brunson-like moment for apple and for cupertino -- >> do you taylor that just for david? is that a new one in your repertoire >> that's one i just unveiled right here. >> yeah. >> you mentioned the band-aid on evs. people are saying the same thing about tesla in some ways, that evs going into a bit of a dark age. it's robotics and ai ascendent and that company will change as

a result? >> it was a dark day as we talked about for musk and tesla, but i do think turning it around in terms of what we've seen the sub-30 vehicle that gets launched next year but it is about autonomous. the golden goose for tesla is autonomous and fsd, but the sub-30 key vehicle was so important they're going to release into next year. for the first time as we've talked about probably in a year and a half, you feel like there is a pilot on the plane and that's snmusk? >> of the two you favor them equally? >> i think apple is the one you fay investigator vor over te tesla -- favor over tesla, because of ai coming, the ai driven upgrade cycle into ai 16, it's a pop like popcorn moment for apple as we look forward. >> you didn't mention the buyback. why are they doing that now? >> whether you look at the buyback, it speaks to our view

from a capital allocation. that free cash flow generation will continue to increase and another drop the mic moment in terms of $110 billion. it's going to be additive to the story. i think coming into this quarter new york city cab driver was bearish on apple and the bears go back into hibernation mode on the apple story. >> not just retail, right. active managers have been reducing exposure for -- to apple for years, night what is the positioning look like? >> the institutional i think the most negative on apple institutionally in four or five years. any positive that you say about apple, you get 25 e-mails coming back saying negative. i like that relative to the setup here. if i'm betting on someone it's cook and cupertino. >> and that's good stuff. important print. great to see you. dan ives. berkshire hathaway shareholders are gathering for the company's annual meeting this weekend. to becky quick who is there and she has a lot more on what we

can expect. becky? >> reporter: hey, david. it's great to see you guys right now. we are looking around, we're on the floor of the berkshire hathaway annual meeting. this is where things will be taking place. obviously, this is the calm before the storm. everybody is set up. you can see this is the booth behind me, a very popular edition in the last couple years. this was a company they picked up when they bought allegheny in 2022 and turns out out to be a popular one for the squishmallows. you got forest rivers, rvs and boats here, berkshire hathaway energy, justin booth is here, c's candy and the geico gecko. looks like it does every year but this is a different meeting than it is normally. this is the first time this meeting is taking place without charlie munger that has raised a lot of questions among shareholders trying to figure out what future of berkshire hathaway is. obviously, this is something they've been planning for a long time, succession, greg able, a

vice chairman there, has been named the ceo successor to warren buffet, but these are questions circulating with the shareholder base. we got a chance to talk to sue decker, the lead director at berkshire hathaway and said even though charlie munger is not here physically the reminders and morality and the culture that he built into this company are still very much alive and well. all of those lessons and talk about those things with us this morning. there are other big issues that are facing berkshire hathaway this time as well. issues that warren buffet laid out in his annual letter to shareholders and talked about how profits at two of their major companies berkshire hathaway energy and bnsf the railroad profits were down, and he talked about that and laid out how they think they're going to get to better profitability and margins. tomorrow warren buffet is taking the stage and he will be there along with chairman greg able and jay james to talk about the

issues facing the company. he will be taking questions from the floor and shareholder questions we've been collecting over time. mike santoli and i are here covering this at 9:30 eastern time tomorrow on cnbc and cnbc.com but again, this is the calm before the storm. they're expecting more than 40,000 shareholders to come here and shop and go into the meetings and listening to all as well. i'll send it back to you. >> i'm curious about the insurance business and how it's doing. the industry has faced scrutiny lately and we've been covering on the inflation data, steep rate increases in auto and home homeowner insurance. >> yeah. those are issues that were -- it took time to build through the pipeline to catch up with the inflation that was so rampant a few years ago. you can't just raise rates automatically at an insurance company. you go state by state and ask the regulators to approve those signoffs. it is something you're seeing

that shows up in the inflation data that fed is watching so closely. i think this year was the year that auto insurance went up across the board because it took them a few years to get those through. i don't know if you remember during the pandemic all the supply chain issues that took place it got a lot more expensive to fix cars between that and the parts and labor, so those were things that they had been pushing for rate increases, and it did take time for the states to say okay and catch up with it. the insurance business was profitable for berkshire hathaway last year. i think that's less because of margins in home and car insurance, more because of the reinsurance and there weren't as many storms. that's what berkshire the big issue in terms of profitability is, whether you see big storms and storm damage that takes place across the country and globe. reinsurance is a big part of that too. >> okay. grab a squish mallo for me, these. thank you very much. >> okay. >> looking forward to the coverage. and just reminder becky and mike santoli will be live in omaha beginning 9:30 eastern

tomorrow. tune in to cnbc or you can stream it on cnbc.com. as we head to break here on "squawk on the street" here's our road map for the hour. more on what's next for stocks and the fed with goldman sachs chief economist jan hatzius after a week of data earnings and another hold on rates. okay. that you sounds of berkshire shareholders gathering and what to expect and then amgen soaring while novo is down. more on the battle over these booming markets for weight ls os drugs as "squawk on the street" comes right back. count on. (grandma) and a million stories to share. (vo) the key to being rich is knowing what counts.

market in rally mode. we have given a little back in the last 20 minutes or so. the s&p up 1.5%. some of the sects turning red, energy, staples, and financials going negative. it is still a broad rally and the nasdaq is leading. it's up 1.6%. technology the best performing sector in the s&p thanks to apple and also some other gainers. energy, first solar, motorola solutions going strong. what to do next is lisa, morgan stanley wealth management cio. lisa, the jobs number certainly helps feed the soft landing narrative and the view that the fed can cut rates. should that be positive for equities? >> look, i'm a little bit of a skeptic here.

i don't think anybody knows anything. you know, i think we were due for a little bit of a lighter payroll number after the streak of upside surprises. our labor data is it's still quite mixed and while i know that market got itself a little bit off sides in terms of positioning, with regard, you know, to worries and fears about a hawkish fed and they, obviously, didn't get one, chair powell never goes there, i just think there's a lot about the repositioning that we're seeing that is just that. we're going back to an estimate on feds funds futures for two cuts as opposed to less than two cuts and where we should be at this point. >> why are you not feeling better about the equity market

market which loves rate cuts? >> i believe this is a market that loves rate cuts but what are the rate cuts going to buy you? the parts of the market that have been, you know, most successfully rewarded, some of the mega cap tech companies, generative ai stories, some of the cyclicals, you know, for the most part they've been in interest rate insensitive for a large part of this cycle. they've benefitted from the fact that that higher interest rates didn't matter and so one of the things we're reminding our clients is, you know, if they didn't matter on the way up, they may not matter on the way down. for us lower interest rates are going to help those who have been left behind, right. so who are some of those? they're the unprofitable companies, the small companies, small cap. they're, you know, some of the emerging markets. you know, type companies who are very interest rate sensitive. and so that's where we would be

buying today. we wouldn't be piling into the stuff that's already expensive, was already interest rate insensitive and now suddenly, you know, the belief is, oh, we could push the multiples higher. >> do you have confidence inflation numbers will come back down? it was a good sign to see average hourly wages but some folks paying attention to the prices paid in the manufacturing numbers which were firmer. of course we got that employment cost index. and there are still questions, right. i think we get the next cpi the week after next on the 15th. >> yeah. we're not convinced. we're not convinced we're on a sustainable path to 2%. do i think that there are clear indications that disinflation is in the economy, yes, i do. but look, the super core inflation numbers have been accelerating for literally 10 months straight. and we shrugged it off for a long time. i think if there's real inflationary pressures there, we know that housing market, which is key to the cpi readings,

single family housing prices are continuing to hold in there. i mean, the latest national housing numbers are up over 6%, up over 7% in urban areas. so, you know, i don't think we're wholly out of the woods yet. let's just remember today's number even on our average hourly earnings as you talked about, 3.9 is less than 4, but just. and 4 is still two times two. >> all right. lisa, thank you very much. skeptical take there. appreciate it. >> absolutely. coming up after this, goldman's first reaction to the bsumr enjo nbewh we're back in just a couple minutes.

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where are my keys? memory and thinking issues keep piling up? it may be due to a buildup of amyloid plaques in the brain. visit morethannormalaging.com it's a beautiful... ...day to fly. wooooo! ♪ welcome back. i'm pippa stevens with your cnbc news update. donald trump says his legal team plans to file a lawsuit

challenging a gag order in his new york criminal hush money trial. the order prevents him from speaking about potential witnesses in the case online or outside of the courtroom. the judge fined him $9,000 earlier this week for breaking it four times. meanwhile, trial testimony continues today with the forensics expert who examined the phone of trump's former fixer michael cohen. connecticut's governor says a major artery linking new england with new york will be closed for days. he says the state will have to take down a bridge over i-95 that was badly damaged by a tanker fire thursday. the governor says he hopes the interstate will reopen before the monday morning rush hour. and china launched an uncrude spacecraft to the moon today. the lunar lander will go on a two-month mission to retrieve rocks and soil from the far side of the moon which faces away from the earth. it's expected to land in early june. david? >> thank you. take a look at amgen shares

up as much as 13%, on news surrounding its weight loss drug. shares of competitors such as eli lilly, where you see right there, novo nordisk as well r both down. let's get to angelica who has more on the story. >> hey, david. yeah, so amgen shares are up this morning after the company saying it will advance its injectable drug for obesity into the final round of clinical trials. that's a big deal for amgen because it's, of course, the final round of trials and it's a huge market for obesity drugs. they're saying they're planning a broad phase three program, so for obesity as well as type 2 diabetes. this news came out yesterday on their earnings call. they're also saying that they are dropping plans to develop an experimental pill for obesity. but investors are happy they're moving ahead with the drug called maritide. they need to prove the drug

works but you're seeing pressure on novo nordisk and eli lilly just on news of this drug moving forward. david? >> i'll take it. thank you. angelica peebles. more on stocks in this morning's jobs number after the break. in the meantime check out shares of estee lauder. it sees a slower recovery for that name which has had no t lt mthf challenges down 34% inheas12ons.

stocks are in rally mode and so are bonds off the weaker than expected jobs report. steve liesman joins us to discuss what today's data might mean for the fed going forward. excited about rate cuts again. >> it's a one-two punch. the job numbers on the heels of the fed meeting restoring confidence in rate cuts but some of that taken away in just the past few minutes by an inflationary undercurrent in the 10:00 a.m. ism services report. a more dovish press conference by the fed than expected on

wednesday, that offered the first and then the jobs report gave the probabilities a second boost. the cut was 38 from 24, not even money and there's the current from the post fed meeting. september, though, hitting 66. it had been under 50% earlier this week. now an even bet a lot of volatility in these numbers with each of the data that comes out. best news from wall street in the muted wage gain, maybe the result of immigrant workers filling lower skilled and lower paying jobs. the lowest gain since june '21, suggests a loosening in the job market. fed chair powell monitors the employment cost index and showed an acceleration first quarter and the ism price index that rick was reporting higher than expected but remains lower than it was two years ago. it was up in the 80s. now fed governor bowman was kind of hinting in this and i will get back to that, she says her baseline outlook is still inflation will decline with rates at colonel levels.

that's part of the sort of what was more dovish this week. willing to hike if inflation progress stalls and reverses and expects inflation to remain elevated for some time. last year's inflation progress was temporary. monetary policy is restrictive and needs more data to know if it's sufficiently restrictive. that was above it was hikes not being on the table, not necessarily signaling any cuts but the idea that the current rate is restrictive enough to bring down inflation, a belief of one of the most hawkish members of the fed makes the statement and the position of the federal reserve more dovish than the market feared. >> appreciate that setup. let's continue that conversation with goldman sachs chief economist head of global research jan hatzius here at post nine. happy friday, thanks for coming in. >> good to be here. >> you nailed the wage number, although in a week where we got unit labor cost are you confident in the trend here? >> i'm confident the wage trend

is down despite the eci and go back to the press conference on wednesday afternoon, chair powell also said that you focus on the year on year rate, in the year was flat, average hourly earnings is below 4%, and if we take a broader look at other wage indicators, the atlanta fed wage tracker, for example, the trend there i think is clearly downward and that's very encouraging. the price inflation numbers have been, obviously, unfavorable and they will need to slow significantly over the next few months for a rate cut to occur, but i do expect that. i do expect much better core pce and cpi numbers in the second quarter. >> you've written a lot lately about relief in the offing in insurance, written about the lag in shelter and that keeps you in the july camp? >> it does keep us in the july

camp. i think that's still the reasonable baseline. it can be later if we don't get as much deceleration in wages, then it probably wouldn't be july. but i think still more likely that it will be a july cut. >> are wages the key to that super core services cpi coming down? >> i think the wages and the labor market rebalancing that we're seeing in the job openings numbers and the quits numbers, i think that is the key to be comfortable that the trend is still down even with these worse month-on-month numbers in the first quarter. >> do you think that if they cut in july or maybe later in the year, that will prevent a recession or something worse on the economy? >> we don't expect a recession. i think if we didn't get a cut in july, that wouldn't put me into the recession camp. we have a probability ofa recession over the next 12 months of 15%. so if you have worse inflation

news, maybe that wouldn't raise that number somewhat, but it's pretty far from 50. >> q2 tracker you're on 3.3 in line with atlanta at the moment. >> right now we're exactly in line, and 1.6% in the first quarter to us seemed held down by special factors, investors, net trade, government, so we think we'll get took about a stronger growth pace. >> do you expect the tone of the fed speak beginning tonight to change over the next few weeks ahead of cpi? >> well, i think the tone on wednesday was more dovish than i think many people had anticipated. i think it was more adamant that rate hikes are not on the table and that's certainly the most important fed speak. what we have from other people is going to depend on a range of views you heard from governor bowman. she's been on the more hawkish side. she is not sure that policy is

sufficiently restrictive. so there is a range of views and i think people will want to see the cpi. >> why do you think policy is sufficiently restrictive? >> because i think the trend in inflation is still downwards. year-on-year rate has continued to come down despite the worst sequential numbers. the labor market continues to rebalance. wage growth is coming down. i don't think you need significant economic weakness to get inflation back down to 2%. i think we're getting inflation. we're on the way to getting inflation back down to 2%. don't forget, we were at 5.6% for core pce inflation now 2.8. we've done three quarters of the adjustment without any weakness in economic activity and i think than can continue. >> do you think financial continues play into the view forward on inflation? powell was asked about this and, you know, the fact that stocks

have been hit and bond yields have risen, i mean, that bodes well for what he's trying to do. if that reverses now, as the market gets excited about rate cuts, is that another challenge? >> well, all else equal, easier financial conditions deliver a positive impulse to grow and then the question is how much growth can the economy do in -- without a set back in inflation. now we've been fortunate to also see very strong supply side numbers. demand has been strong. supply has been even stronger. you can see that from the rebalancing in the labor market. despite these high jobs numbers, today's number withas weaker bu 1.75 is not terrible. despite strong employment numbers the unemployment rate drifting up. quits are down. all of that is telling you that we are rebalancing without economic weakness. >> finally really quick, ism

employment today expectations, hiring intentions percentages are beginning to game out very low numbers for the coming months in payrolls. there is a downside risk to your portfolio? >> there is a little bit more downside risk if i look at some of the surveys that have been a number of them and you mentioned them both of these service indices for purchasing managers, ism, and market were on the weaker side. the new york fed survey of expectations among consumers on the job market has been softer. so we'll monitor it. the good news is, it's coming via still very subdued hiring. we have not seen a major layoff wave and the claims numbers continue to be very encouraging. to me, this still looks like a controlled deceleration which is better than the alternative. >> always great stuff. thanks, jan, for helping us. jan hatzius.

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next week we're going to be live from the milken institute global conference on "squawk on the street." i will sit down with the ceos of apollo, goldman sachs, exxonmobil and next from steven mnuchin, former treasury secretary perhaps pursuing tiktok, for example, and we'll talk ai. openai's brad lightcap will be my guest. >> i'll be there with you. hearing from the ceos of ibm, ai front and center, chevron,

mattel. we've got an exclusive with jane fraser the ceo of citigroup who has been knee deep in her restructuring turnaround. that's going to be coming up on monday afternoon and ken griffin from citadel. >> all the big investors are there. >> yes. >> we want to hear -- he has not revealed who he is supporting in the election. >> any chance he would support biden? come on. >> doubtful. >> yeah. >> so maybe he's got somebody else in mind other than the other candidate. >> we'll wait until he answers the question next week. that ism prices paid, some of the shine off the data as steve said. dow is hdi otoaiolngn gn of 361. stay with us. ch is less about reaching a magic number... and more about discovering magic. this is our future, ma. godaddy airo. creates a logo, website, even social posts...

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up to a gig in millions of locations. plus, buy one unlimited line and get one free. that's like getting two unlimited lines for twenty dollars a month each for a year. so, ditch the other guys and switch today. buy one line of unlimited, get one free for a year with xfinity mobile! plus, save even more and get an eligible 5g phone on us! visit xfinitymobile.com today. stocks are higher. s&p is adding a full percent right now. the nasdaq is leading 1.8%. a little bit off the highs. stocks initially surging on the report. what's next for stocks? senior markets commentator mike santoli is out in omaha, ahead of berkshire hathaway's meeting, with his take in what we've seen in reaction to jobs and whether you think it's justified. >> i think it is, sara.

especially if the yield move starts to look like, you know, the near-term high is in for market yields, right around 470 on the ten-year. i think it's the latest in a series of things this week that the market was kind of tensed up for and then we got a not so bad response. that includes amazon, apple earnings as well as powell, even the employment cost index. it's a cause for concern but didn't blow out yields too much higher. i see the market trying to fight it out in the minor pullback range. the high for today was just another visit to the 50-day average. it didn't hold there. we did that once before on this run earlier this week. we'll see if we have more chopping around to do. in aggregate the earning story is coming through. yields, if they stay tame, are fine. i don't think it's about how much when we're talking about easing policy by the fed. it's more does the soft landing seem plausible.

>> what about berkshire, mike, so it's off the highs. it's had a pretty nice run, though, in the last 18 months. what will you be listening for? >> excellent run. it fits in so many buckets that people are interested in right now. certainly the quality trade has been dominant and berkshire hathaway in terms of balance sheet quality. the apple stake is interesting. it's 5.9% berkshire owns. they'll own more because apple will keep buying back stock from everybody else, presumably not as much from berk berkshire @hathaway. it's fitting the model which buffett has bucked about. it's indispensable brand product company. the services growth is better than the product growth. that's where the higher pe should be placed on. all these things are fitting into place. in general, i expect to hopefully hear his outlook on the insurance industry and bond yields. i'm sure there's going to be talk about the fiscal position of the u.s. over the course of

the weekend. >> okay, mike, thank you. mike santoli will have a busy weekend at berkshire's big meeting. did want to share reporting we heard earlier on "squawk on the street," with the continued saga at paramount in terms of potential change in ownership of the company. a new bid from partnership of apollo and sony. sony being the primary partner is being taken quite seriously by the special committee that's been tasked with reviewing potential offers for the company. that's a contrast to the previous letter that had no specific content that got the attention of the special committee previously from apollo. this very much serious, has specifics in terms of price, both premium for the b holders and significant premium above that for shari redstone who owns

control of the stake of the company through the a shares. the exclusivitity period in which skydance is negotiating which is a complex deal we've explained a number of times involving a purchase of the sky dance studio and merging of that and -- plus the purchase by that group of a significant number of primary shares from paramount and buyback of existing b shares at a premium. that deal, the exclusive period will expire tonight. as i reported, is not expected to be renewed in any way. that will expire giving the special committee a beginning to explore more about sony and apollo's buy. you would merge the studios together. should point out as well there is the possibility that nothing happens. that you continue on as the company currently is constructed

with three people running it. a very strange situation at present, of course. this leadership came up with earlier when bob bakish departed the company and they pursue on their own a renewal plan. that being pushed by one member of the special committee, i'm told, but it remains unclear, exactly, how much momentum that really has. certainly in the face of this current bid. as a reminder, we'll have all that coverage from omaha, becky quick, mike santoli and that man right there. that starts on monday morning. don't miss it. you can also stream it as well over the weekend on cnbc.com. we're back after this. the future is not just going to happen.

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good friday morning. welcome to "money movers." i'm sara eisen with carl quintanilla. former nec director gary cohn. the ceo of hasbro is with us. stock is up 20% for the