s&p futures off by six. the nasdaq is off by less than 30. treasury yields have been a little bit weaker. 4.21% on the ten-year right now. that does it for us this week. it's been a good week. it's been a lot that's been happening. >> what do you mean? >> well, there's just been a lot happening. things to watch from the federal reserve, see what's coming out of washington. we are going to see you right back here next week. >> another good week. >> stay tuned with "squawk on the street." they've got a lot that's happening. opening bell coming up, last opening bell of the week shortly. see you later. have a great weekend. good friday morning, welcome to "squawk on the street." i'm david faber at post nine of the new york stock exchange. jim cramer is over at one market in san francisco. wrapping up what has been an amazing week for jim out west. let's give you a look at futures as we get ready to begin trading for the final day of trading of the week. do we have that? maybe not.

all right. well, if we don't, we'll get to our road map. it does start with that record run for stocks. major indexes seeing a four-day win streak, the dow nearing 40,000 for the first time and the s&p, it has been holding above 5,200. fedex shares also surging this morning, despite what was a revenue miss for the eighth straight quarter, the company saying it's seeing results from cost-cutting efforts. and are there some warning signs in retail? nike and lululemon shares both moving lower. nike is seeing slower growth in china. lulu, less optimistic about its b business in north america. let's start with the markets. record retail, despite that pullback in apple shares and really throughout the course of this year so far, apple shares have not participated, as we pointed out many times, jim, in the overall rally. >> look, people regard it as a no-growth company, 2% max.

people are looking at the phone itself, and then insult to injury, jonathan kanter on this morning, really basically calling them not a monopolist but a company that is trying very hard to pressure other companies that are in their universe. i think that there will be a bit of a hangover. there will be some analysts who took it very seriously. it is not the one known for a.i., david. t the other companies in the magnificent seven are a.i. companies, although tesla, cutting production in china is bringing that one down. i would stay -- i would, of course, stay long it. i don't think there was anything in justice that was anything more than a mosaic of oddities that they chose to focus on with some pull quotes that i think you would say, jim, i don't want you to bring that up, because they're not substantive enough. i think you would say to me, jim, if you have something substantive, why don't we use it in the so-called a-block? and then you would say, let's hold that back to a "mad dash." that's how i feel about the

justice department's case. >> too bad. too bad. you don't get to decide. you started on apple, so we'll just stay there for now. >> fair enough. >> i would point out, by the way, on the a.i., let's not forget this week began -- i believe it was this week with the stories about alphabet and apple, and in fact, helped the stock prices of both. >> bloomberg story, no real confirmation of it, and by the way, just -- just so we're sure, many people felt that alphabet itself, the stock, was going to falter badly during this spring, and if you take a look at it, it is one of the best performers, and david, as you know, it's got the fabled reverse head-and-shoulders chart that i often point out to you as being incredibly important, because i know you're a fundamentalist. >> well, i'm a technical analyst, of course. that's what i have spent most of my time doing, as you well know. that's reverse head and shoulders, right?

just making sure. >> that de niro outfit has me very focused. >> i'll see you at the disco later, i hope, as usual, our friday night? >> i'm taking a red-eye, because i really have poor sleep. >> you always do. you never sleep. back to apple. you don't want to give the doj a lot of time, but jonathan kanter was a guest earlier on "squawk box" talking about the case that they are bringing. as we made the point yesterday, jim, it will be years in the making, and so, who knows? the stock did suffer yesterday, though, on the announcement. take a listen to a little bit of what mr. kanter had to share earlier on "squawk box." >> our concerns are not with necessarily what apple is doing with apple's products. our concerns are with restrictions when apple tells others what they can and can't do with their products. that is our primary area of concern, and that is the primary area of our focus in the lawsuit. and ultimately, allowing others to innovate will yield more benefits, including the kinds of

benefits that apple is able to generate, and we talk about this in our lawsuit, when it had access to the windows operating system in the early 2000s, so that it could launch products like itunes, ipod, and the iphone. >> trying to connect, in fact, previous antitrust actions and the benefits that were brought in part for apple as you heard him do there. >> right. well, look, i think that if we were to look at costco and say, you know what, if you want to sell in costco, you're going to have to play by these rules, not by your own rules, by that take, then jonathan kanter should go after costco. it really is that. i'm not being facetious. it's the same kind of lonlic. costco's the second biggest. they can determine a lot of different things. you would go after costco. and what i'm neglecting to point out, and i should have said right at the top of the show, jonathan kanter worked at paul weiss. really nice man. >> oh, no. are you pulling away on -- what do you mean?

you've always said really nice things about kanter. you've always complimented his seriousness, his focus. now you're just going with nice guy? what happened? >> paul weiss is my attorney, and they've been so for almost 40 years, and i expected more. i expected more of a rigorous lawsuit. i expected, as i went over it, to see something more than, you know what, we should offer the apple watch. it makes it so it's very difficult to get away from the ecosystem. i was shocked. i thought that there would be a smoking gun here. i thought that there was something like microsoft with its 95% share. i even thought maybe there was a reference to standard oil, trying to get 100% share. david, instead, they're talking about the performance, high-performance phones, and that they dominate high-performance. it's actually a brand-new category. i've never heard of it before. and frankly, what they're trying to do is say, it doesn't matter that apple has 20% worldwide

share. ignore that. when it comes to the high-performance phone, they have a very big share. how did they make up this category? i do not know. and i thought after i finished reading it that i want the hour and 15 minutes it took me, no more than that, i want that time back. i want it back. >> wow. >> so i can focus on more substantive research and things that matter to our viewers. >> okay. i guess we'll do that, and that is quite an indictment from you on -- >> it is meant to be. >> -- on the department of justice's case. >> this sounds like a swan song for someone who recognizes that he may not be running the antitrust department of the justice department six months from now. >> oh. well, that is certainly a real possibility. all right. you want to move on to a couple of the other earnings movers this morning? or you want to -- the only thing i would add on apple, back to a.i., is this "wall street journal" report that they held talks with china's baidu for use

of a.i. on the devices. it's not like they're going to be using alphabet's gemini in china. you want to use the local provider if you're going to stay in at least the good graces of the chinese government. >> yes. google has no -- google and meta, nothing in china. >> no, they're not allowed -- basically, they're not allowed to be there. >> right. so, wow. i think that was a really good idea. and that partner would be very, very good. that would actually be something that i wouldn't be surprised if jonathan kanter put in, since it's equally as unpersuasive. >> oof. wow. you know, you always surprise me. after all these years of being together, our long time, you still surprise me. you still make it interesting, jim. >> well, i just think it was beyond the pale. it was a pastiche if not mosaic. >> don't buy me a bathing suit on temu, though. >> i thought if i had hired him at paul weiss, i would throw it back at him and say, pick your best five pages. >> i didn't get anything out of

him there. i was referred to us like we were married. did you get it? i was referring to that absurd decision you made to buy your wife a bathing suit on temu. >> that was a major mistake and ill-advised. i think it came with a fire hazard label. >> who would ever do that? are you trying to get divorced? what were you thinking? >> it came in a fedex package, and i opened it up. >> oh, a fedex package. perfect. perfect segue. >> oh! >> thank you. >> excellent. all right, fedex shares are going to be up, jim. the take i'm hearing, having talked to one large shareholder, expressed margins stronger than had been thought, even though 2.5% is not much to speak about. it's a lot better than it's been. the cost-cutting is starting to take hold. the entirety of the beat appears to have been expressed margins. this is a company that has blown up previously in a weak demand environment, but the question is maybe they can hang in there if there is one. and they seem to be getting better at managing expectations, not to mention the $5 billion buyback is a big number.

what's your take? >> two points here that need to be made. raj subramanian said it was an unwieldy structure. he's slowly weaning himself off the multiple different structures that had been like different companies. what's incredible here, david, is the second thing. they had no revenue growth and made this amount of money. can you imagine what happens when they get revenue growth? europe was particularly tough for them. they've gkept 70% of the busines they got from the u.p.s. work stoppage. 70% of the customers who were with u.p.s. who then went to fedex stayed. that's a rather remarkable number. this is a tour de force quarter, and i think that you and i both remember when there might have been almost been activists because they had so many md-111 planes which were being retired. they did not have the right

infrastructure. they had too many people, 22,000 people now out. remarkable quarter. and deserves to be up this much. >> yeah. right. i mean, they did obviously have an -- a significant activist, a couple of board seats, de shaw. let's take a listen to subramaniam from the call. >> for the third consecutive quarter, we delivered operating income growth and margin expansion in a declining revenue environment. this is a very positive dynamic and a unique one in our industry. it demonstrates clear progress on our transmission and ability to manage what's within our control. >> that, i guess, is the point you're making and the one i made as well, the fact that they are, again, express has been one of the key areas of concern, and they are starting to actually show a margin there. you think positive things for the future as well then, jim?

>> most definitely. and i don't think europe can deteriorate any much more than it has. i do think that raj recognized with his drive program that there was, unfortunately, i'm going to say a lot of fat. they just added on. i mean, they ground, express, he wants to make this into a -- let's say a structure that looks like any other company. and when he's done that, you're going to see the earnings power. it is amazing, by the way, the e-commerce, which is part and parcel of the business, is just not strong. it's just not strong, because europe is so weak. china, okay. i don't think that europe can stay as weak as it is. i've been asking some bankers over there, could it really be this bad? there is the sense that it's just hard to do business there still. germany is the problem. germany is very weak, david. i did not know that. >> the german economy is not in great shape right now. >> took a turn for the down.

let's get to nike here. we can get to it again after it opens, but no revenue growth in calendar 2024, says rbc. leaves little to play for. that's a downgrade this morning. you can see the stock is going to be down. slowing china sales as well. what are your thoughts? >> they are -- they're not delusional, boughtecause right e top, they talk about the four thing that are wrong, wholesalers, pushing new product, need to sharpen on sports. this is typically the season when you buy nike because it's ahead of the paris olympics. i would urge people not to do so until they come up with a more serious game plan to be able to reverse these problems that they talked about right at the top. i was not as disappointed as they were. their digital growth was -- i would put it in the pathetic category. this stock deserves to be down as much as it is, even though it's been a continual decline. by the way, we have been focused on china being bad. i think that's a mistake.

i thought it was somewhat of a bright spot versus the united states. >> and they are taking to criticizing themselves. ceo john donahoe saying, "we know nike is not performing at our potential. it's been clear we need to make important adjustments." take a listen to some of his other comments from the call. >> q3 performed in line with our expectations. that said, we know nike's not performing at our potential. while our consumer-direct acceleration strategy has driven growth and direct connections with consumers, it's been clear that we need to make some important adjustments. >> all right. essentially saying what i just paraphrased as well. what do you think those adjustments will be? >> i think they have to decide who they are. i mean, do they go back into other companies' stores? have they lost share? i would have talked about that, to new balance. lost share to hoku. lost share to on. they were very tough on themselves, even though inventories were down, which i

thought was positive. this is a high-performance company that's not operating at its level of high performance. i think john donahoe can fix this. it's not like the category is bad. i also think, by the way, air has gotten old. i always thought, when would air get old? it was this quarter. i think they can fix this, but they have to start with really trying to figure out what went wrong and why they didn't do what looked -- what took so long for refresh. but they were hard on themselves, and i respect that. >> all right. well, coming up, after we take a quick break, it is going to be day two of trading for reddit, this after what was a strong public debut for the social media company. let's give you another -- actually, our first look at futures this morning. resqwkn e re" ing much at all. mo "ua othstet straight ahead.

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we made a profit in the back half of 2023. we grew revenue three times as fast as costs last year, and so what's, i think, beyond the community of reddit and the platform of reddit, there's actually a very nice, special business here. and our gross margins are very high. the high 80s and have been for a long time. and so, even small improvements in revenue go straight to the bottom line for us, so this is truly, i think, a special company. and profitability is -- no, it's an important milestone for us, and we're getting closer and closer. >> that was reddit ceo steve huffman. he was with us right here at post nine yesterday, of course, as the social media company had what was a very successful debut. stock was up 48% as it closed trading. price was $34, if you recall. perhaps some of those gains given back today. jim, that was the big question. he answered it, and certainly the market, at least day one, seemed to be happy, given they

have not been profitable in any one year in the 19 years that they have been around. >> i thought that interview was great. and one of the things that is very true that really just surprised me was that huffman, working with morgan stanley, placed this thing very, very well. i know he was actively involved with who it should go with. he went with the sticky people who work at reddit. i don't think they're going to flip. this was very well done offering, david, and i think it could have been a major botch. it could have opened at $90, worked its way down to $40. instead, it went the other way, kind of went up, opened pretty good, went down, went up the rest of the day, different from uber, which was a fiasco. i applaud this, and while i know you guys were very tough on him when it comes to when they'll turn a profit, i thought he was a very seasoned exec when you spoke with him. kudos. well done. >> any signs it gives out for

the broader ipo market? we had another initial public offering this week we talked about that did extremely well in its debut. we have been waiting for what -- certainly, there are plenty of private companies that have been waiting to go public, and yet, they have yet to really show up in force. >> i think it's going to matter tremendously. out here at nvidia, i spent a lot of time talking with people who work with nvidia for health care. they're almost all private companies. they almost all want to tap the equity markets. and they're not phony a.i. they're real a.i. i think they're ready to roll. i think morgan stanley, which is owned by my travel trust, had been kind of invisible during the period. i think they're ready to bring some deals. goldman, ready. i think it's time. i think it's going to be that spring period before the hamptons where people get deals done. >> all right, we'll see. it will be interesting, because we have -- it has been notable by its absence, given the strength in the broader market. jim, get ready. you got a "mad dash" to close out the week coming up.

let's give you one more look at futures. we get started with trading here about eight minutes from now. you can see it's a mixed picture for the broader markets. we're back right after this. meet ron. ron eats, sleeps and breathes hoops. and there's not a no look pass, double double, or buzzer beater he won't wax poetic on. ad nauseam. but oh how he can nail a software solution like the best high screen pick and roll you've ever seen. you need ron. ron needs a retirement plan. work with principal so we can help you help ron with a retirement and benefits plan that's right for him. let our expertise round out yours. [sfx: wind, rain and rolling thunder]

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take a look at the laggards as we head into trading day. lulu topping the list. we will get to it, don't you worry, after the company reported earnings that are not being really responded to, at least if you own the stock. tesla also, some stories there. we'll also mention that. so, you got a lot to tune in for still to come, including jim's "mad dash." by the way, don't forget, you can catch us any time, anywhere, by listening to and following eng llpoasee n the strt: opinbe" dct. we're right back.

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>> announcer: the opening bell is brought to you by nuveen, the leader in income, alternatives, and responsible investing. all right. last cross-country "mad dash" of the week. you know, we saw lulu. it's going to be down sharply. what's going on there, jim? >> this was a very tough call from a very high-quality management where they just mentioned several times, u.s. traffic has slowed. high single digits. i was very surprised. that is a big letdown.

the company was really somewhat mortified by what they're talking about a slowdown, really pretty much across the board. broad-based is the term they used. this was surprising. and their forecast, you know, 10, 11%? this is a high-growth company, and i think that they, themselves, were caught unaware at how weak they can be. i don't know if they can pull out this fast. cal mcdonald it -- it's a very well-run company, the ceo. i think they did blame the consumer at one point, not themselves. i think that that is something that i question, because the consumer was very strong in a lot of other places. but geez, this was just sheer disappointment. surprised there weren't downgrades on the street. no one wants to leave this company, because it's been so successful. >> yeah. >> just a weak, weak quarter. >> again, the news that really seems to be moving it is the fact that, first fiscal, first

quarter '24 guidance is for 9 to 10%. increases year over year, jim, which is below virtually every estimate out there from the analysts. >> yeah. and you know, you can go to ralph lauren and get much better numbers. pvh, you can look at the numbers and say, wow, wait a second. this was a suboptimal quarter. the question, is should we draw a pattern? >> nick: >> nike, lulu, are these companies that are charging too much? that's what i question. they don't address the competition in any of these. they act as if they're kings. i don't think they're kings anymore. >> stock opens down over 14, almost 15%. you heard the opening bell there. you can take a look at the realtime exchange. here at the big board, water technology company xylem. over at the nasdaq, financial services company citizens & northern celebrating its 160th anniversary. >> wow. >> well done.

that's a long time. >> that's pretty good. >> that's older than you. >> how come -- thank you for that. xylem doesn't sound very loud, david. it's a bit of a subdued group there? >> it's not a large group here. not that large a group. >> yeah, company had a changeover -- they had actives that got involved. i felt because of the secular notion of clean water, it's still a winner. it's not my favorite in the group. pender, which does similar things, was downgraded today. let's keep that in mind. >> i will keep that in mine. what do you want to start with? >> we got to talk about boeing. >> let's talk boeing. by the way, when is my apology coming? you blamed me for selling the stock when i forced -- finally forced your hand. >> david, i apologize. >> oh, i heard that. >> well, this is two days in a row that it's up. >> it's up on what doesn't seem to be great news. i don't know, jim. take it away. >> okay.

perhaps there are people who think that the problem with the company is the ceo, david calhoun, because airline ceos are seeking a meeting with boeing directors. they don't want to meet with calhoun. perhaps there are people saying if calhoun is out, and this is indicative of something that would start the chain of him being out, someone new could come in. the board is actually a heavyweight board, and i do think that this could be the beginning of the end if they're going to insist on meeting with the directors. the directors, just looking at them, i mean, you've got dave gitland atcarrier. steve, we know him as a tough -- >> i know him from his time running qualcomm, yep. >> you have a four-star admiral. they tend to be pretty serious and have their own view of things. there's a former united technologies executive, again, very important. larry kelner, the executive chairman, knows the business

very well from continental. a ge aviation person. these people are not going to be rolled if they meet. boeing, in you were the, only offered -- if these airline executives, which of course the customers press, there will be a change. there will be a change at the top. you can't have your customers rebel against you and think that you can keep the strategy as it's currently -- >> and those customers, obviously, frustrated, certainly the ones that rely a lot on boeing to supply their fleet by the slowdowns in manufacturing, brought about by all the missteps, jim, that mean essentially they have fewer planes that can fly, so there's reduction in capacity, or at least below what they had anticipated coming into the year. >> i look for a person like david, who's been so successful at carrier, to want to be at a meeting with the executives. i think this idea of just sending the non-executive chairman is a nonstarter when you have your major customers that want to meet with the board. >> yeah, although that is typically -- you're going to have sort of your lead director,

non-executive chairman in this case, kind of conduct those in the same way they would with shareholders. you're not going to send the whole board in. that's very atypical, jim. i mean, maybe you think they should. >> that's true. i think they should have a committee that meets. i don't think it should just be one person. and david, the one thing i would say is that there really is only one other maker. airbus. i don't think people want to go to airbus. i also, by the way, think if there was a change at the top, perhaps the faa cowould like th. all that said, mr. calhoun has been very forthcoming in his interviews, but maybe that doesn't cut it. we've seen time and again that until you have someone change at the top, people feel that nothing can change culturally. this board is, again, filled with people who cannot be bought. it will be very interesting to see what happens. >> and we will watch it and watch it closely, of course, as you take a look at boeing shares, which, as jim pointed

out, are up, and there's a comparison versus airbus, which has been gaining market share. >> yes. all right, where else should we head? i mean, apple shares are down a bit. meta is down a bit. i see alphabet, though, eking out some gains so far this morning. >> i wonder whether people feel that the story will come to fruition this weekend, perhaps, about a tie-in with apple. there is a, by the way, a positive analyst note about how they're actually much more in the sweet spot than we thought. the apple, by the way, you have to get rid of all the people who don't understand what's really going on, that this is a two, three, four-year issue. they all have to flee, because they are what i regard as being summer soldier shareholders. >> summer soldier? okay. so, they're not in it for the -- >> sunshine patriot shareholders. >> right. got it. but don't you feel as though -- i mean, what's going to be the

catalyst for this stock? you have to wait, at the very least, for june, don't you, for the developers conference? >> well, i have to tell you, i think the catalyst, number one, will be they can get alphabet as, you know, google as their a.i. that means they don't have to spend a fortune. maybe they can do something in this iphone 16. but the other, not to beat a horse too severely, but what i saw from jensen huang and what they could be able to -- the streaming, the omniverse to the -- >> oh, right the vision pro. you've talked about it. what was it that you saw, jim? this is not the first time you've brought this up since you've been out there. what has captured your imagination here? >> they think, at nvidia, very strongly that you can demonstrate the sale of cars, that ford motor should be in touch with them. they have a nissan relationship. homes might be better to be looked at through the vision pro. and then, the $40 trillion

market that is manufacturing of factories would be sped up, and if the -- if apple just realized they should call a company and everyone on the factory floor should be playing the role of the digital twin, and the digital twin, streamed by omniverse to the vision pro, would be, jensen huang says, a game-changer for all companies, including apple. i did notice, by the way, that medtronic feels that they have been working very closely with nvidia to be able to put a lot of a.i. in their product. it's not a relationship that is for show. but apple has to demonstrate that they are more interested in this and address the keynote where jensen huang, the ceo of nvidia, directly references how well this could be done in order to be able to sell cars. >> why wouldn't mark zuckerberg say, hey, we can do this too? >> he should. >> i mean, remember his famous product review of the vision pro, where not unexpectedly, he came out and said, "i think we

do it better"? >> i think that he should press that. i think that's actually wise. i think i'd rather pair with apple, because they think so much of the vision pro. but if apple doesn't embrace it, i don't think zuckerberg will be far behind. >> okay. all right. jim, tesla shares are down another 3.3%. it's right kind of close to where sort of the recent lows. stock down some 30 -- let's call it 3% for the year thus far. the latest story that we've got, i believe, is a bloomberg story from this morning talking about reduced electric car production at the biggest plant it owns. that's in china, of course. the shanghai plant. they're citing people familiar with the matter saying that earlier this month, they instructed employees at the shanghai facility to lower production of both the model y and the model 3 sedan. those are both the ones that are made in china.

they're now working five days a week. they had been working six and a half days. that, at least, again, is bloomberg citing people who were not authorized to speak publicly but at least spoke to them, i guess. >> this is a very challenging moment for them. the chinese companies have been, i think we've seen -- one thing we've seen in the last six months, china knows how to build a really great, cheap electric car. musk has addressed that directly. i am concerned for them, given the fact that china has become aggressive and china has a government that is willing to help these auto companies. so, it is a very difficult situation, and then if you switch over to germany, the fedex was saying yesterday that germany's quite weak. you've got these markets that aren't strong. we're not taulking much about al about the cybertruck. this is just -- i still that you should be interested in owning tesla, because it is so low, but they raised prices earlier in

america, but it is a challenging moment for tesla. and for musk, now, david, musk has got so many things on his plate, i don't know how much he's focused on the day-to-day at tesla. >> that always becomes a question. obviously, he seems to have been capable of focusing on a great many things, and sort of -- but he does sort of move -- all right, spacex. i'm going to go into demon mode, as they like to call it for a little while there. there's a problem. and then to tesla. but to your point, the chinese automakers have increased the quality of their cars, simply put. the technology in them, the overall quality of them, it's not just byd. it's any number of other makers, byd being the leader, and that makes for more competitive markets, both in the domestic market in china but outside of china as well, jim. >> yes, i keep hearing about the trojan horse that is volvo where you can put the right amount of american content but make most of it in mexico, get it to the

united states, and that would be the company that could upend the market. mexico -- remember that amazing report that just should be talked about far more. phil lebeau going to chile and seeing that that has become a chinese market. mexico, 30% of the vehicles are chinese. they will get them through this country if president biden isn't careful about addressing this issue. i say this because former president trump is all over them, trying to stop them from wherever they are. i think president biden should be more concerned about the state of michigan and stopping volvo. >> yeah. interesting. i mean, of course, the other side is you can provide an incredibly low-priced vehicle if you wanted to do that, but of course, you would then undermine our domestic manufacturers. that comes in a lot of different areas, not just automobiles. solar panels, certainly, is another example for one that we've really tried to keep out, to generate some actual domestic

manufacturing, not just from this one company for solar. >> david, you're saying that the environmental agenda may be put to the side for a moment in order to get so the unions and, again, the state of michigan get aligned with an election year. i'd hate to think that the planet takes second fiddle to the election year, but it is -- we are pretty close to it. >> there are a lot of things that could be a challenge, including datacenters and the power they use, because it's got to come from somewhere. jim, i want to go back to spac land, which i visited yesterday for the first time in a while, and you know why, of course, talking about digital world acquisition corp. we warned people for so long during that '21 period, when spacs were all the rage. digital world acquisition corp. has been out there for a cellular very long time.

it was underwritten by a firm calmed ef hutton, and then it was mired in regulatory uncertainty for a very long time as it did not get the review from the s.e.c., in part because there were a lot of questions about the previous management there having already spoken prior to actually listing and issuing the shares of the spac to trump media and technology group, namely truth social being the key thing. but that's all behind us now. the vote's today. there's virtually no doubt that shareholders are going to approve this deal. wouldn't you? if you don't, then the deal doesn't happen, and then that's it. spac goes away. you get your ten bucks back. so, yeah, they're going to approve it at 44 bucks, aren't they? and as i pointed out next week, more importantly, the de-spac occurs. the additional shares hit the market. and i tried to explain that to people. sometimes we may need to go back, because people may have forgotten how spacs work. the sponsor shares, the new

shares that come in, trump media and technology group is going to own some, by my reading of the latest filing, some 87.5 million shares, and then have the opportunity to earn another 40 million shares in what could be a very quick manner because all those shares have to do is stay above $17.50 for 20 trading days for that 40 million to go. you're talking 127.5 million shares. trump owns 90% of that. it's an enormous potential number, jim, but the question, of course, is if and when you go to try and monetize what happens, because we are talking about a company that thus far has had very little in the way of revenues, some $3 million for what would be, if you do all in and include warrants and converts, you get a share base of over $200 million, so you can do the math. thing would be worth over $8 billion at the time of its

de-spaccing. that's fully diluted. really around 169 million shares, it appears, at the time of de-spaccing. >> you were the first person to go over this. i spent a lot of time parsing what you said. djt would be the, by the way, the symbol if this deal goes through on monday. and david, i can't believe there will be a bank that wants to make that -- you know, really, what is a margin loan for president trump using that stock, because if that stock goes down precipitously, you will have a twitter on your hands, which obviously hurt morgan stanley for a while. but maybe worse, because here, at least there was revenues. there's almost no revenues here. i think you brought to the fore the problem, writ large, of spacs. i remember you did the same thing with lucid. this one is far worse. this is one where it is political that the stock is up here, the faithful, obviously, want it up here, but david, this company would never be if it weren't connected with trump

valued at even one-tenth of what it's going to be valued at. >> that would seem to be the case. at least based on fundamentals. now, that said, if he were to win the presidency and use truth social as his way to communicate once again, you could make a case that it will become a vital area for everybody to at least be watching, so advertising revenue would probably significantly increase. it's fascinating for that reason. we're keeping an eye on it, as i said, the vote, no question really, today, de-spaccing next week, maybe on the 26th or so. we'll see what the date is. and then, we'll be able to watch djt trade. if you want to access those shares and start selling, that could be the end of it in some way. to your point, while i reported yesterday that there have at least been conversations that i have been hearing took place, though haven't been able to confirm, about would there be a way for him to at least use some of the shares as collateral for a loan, that has not happened. to your point, jim, that has not

happened. >> you know, david, you raised an amazing point yesterday. you said, you cannot borrow it, and i was realizing, maybe people should realize at home what that means, that people are gunning against it, but they can't win, correct? >> yeah. i mean, the borrow is something like 300 -- it's an -- you can if you want to pay some crazy number, but it virtually makes it impossible to do so, at least for most. yeah. >> it's incredible how it's not rigged, obviously, but the system is not going to be able to work well, the capital system won't work well with this particular item, in part because there are people who recognize that maybe this could get president trump out of what's perceived to be a jam for cash. >> exactly. but again, on paper, at least, when this thing is trading publicly as djt, if it maintains the current price, the company he's merging into it, trump media and technology group, will be worth that -- that stake will

be worth some $5.5 billion. before we hit a break, i want to check with you. anything else you wanted to hit this morning? >> i remember if donaldson would be around, they'd be able to finance it. they financed all of trump's junk bonds for casinos. >> i do. >> they're not in business. that would be a logical place to go. >> dlj -- >> djt does not have dlj. wasn't that something? they were so good, but they did those deals. >> they -- they got a decent price when they sold. >> oh, yes, they did. they were quality. and i miss them, because the three principals were extraordinary people. all right, i'll give you a bond report. i know you have been wanting to hear one, jim. we're going to check out how treasurys are faring this morning. couple of days since our big fed meeting, and the press conference where we heard jay powell, and there's a look at yields, ten-year is down, 4.214%

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all right. there's cramer. were you getting a tour there? what am i looking at here, jim? >> i went over to see the robotics section. it was amazing because robotics are going to be improved by the new chip. they're not there yet. they're doing pedestrian things. when they're done that bartender will be able to make me a much better drink than he made me yesterday or two days ago. that was a mocktail by the way. >> i know.

you're not drinking during the day. there you are. wow. >> that's me being -- that's me saying that apple should be talking right now to jensen because that's me in a nissan car. i had no idea i was not in the car. there's me opening the trunk. >> you look very strange there. >> well, there i am sitting in the bucket seat trying to get -- trying to fix the seat belt. then ultimately i get out and don't realize i'm not in the car and swing my leg as if i'm worried about hitting the rocker panels. >> we have a short time for stop trading. what do you got in chipotle? >> you know, i feel like we -- there's an issue going on right now with how much the stock split means. watch chipotle. i think it went up a huge amount because they announced a split. now, of course, what you do need is some earnings or some upgrades. i think that, david, we're going

to talk about the split next week. the first time i've heard an economic reason for why it's justified. it's so much easier to buy a stock with a large order if you do a 50 for 1. i can't wait to see you. >> yeah. well, you won't because i'm going to be away next week. what do you got tonight? >> you are supposed to say you're off on the morning. i'm going to be on assignment relaxing somewhere. >> good for you. >> okta, by the way, i think made a comeback from a terrible breach they had to become the number one in identity. roblox had a terrific quarter. and then amrita, block, the old square, made changes and trying to become much more of a bank. it's a winner. i got three winners tonight. >> you've had winners all week, jim. >> thank you. >> just great stuff. great content as we like to say. great -- >> justice is served, david. >> justice is served.

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♪ good friday morning. welcome to another hour of "squawk on the street." i'm sara eisen with david faber, live at post nine of the new york stock exchange. k carl has the morning off. stocks are weaker after what's been an incredible run to record highs. the s&p is pretty much up changed. consumer discretionary drags down the index and the nasdaq little changed. the dow down 43 points. take a look at treasuries. we have seen higher yields on the back of the dollar post fed but there's buying and the 10-year down to 4.2%. the 2-year under 4.6%. 30 minutes into the trading session. three movers we're watching.

fedex shares are soaring raising guidance despite what it calls a difficult demand environment missing sales estimates for an eighth straight quarter and will trim spending and plans to buy back $5 billion in shares. we'll talk more about fedex in just a moment. shares of newly listed reddit under pressure on its second day of trading. they surged almost 50% on the debut yesterday. important top keep in mind. investors, is that now? >> i don't know what that is. no. that's not now. the stock is down 8% now. >> all right. here's tesla. it's down 8%. it was up 50. here's tesla. investors hitting the brakes on that one. reports the ev maker is cutting production in china as it struggles with sales and increasing competition. shares are down more than 30% this year, more than 40% off recent highs. well this was a big week for the markets. we got past the fed. we got past a number of other central banks. the message so far from central

banks is, party on. and i think investors got that message with the s&p, nasdaq and dow running to record highs. not just a u.s. story. the nikkei in japan, fresh record highs. we know that has been a story for a while now, but even in the face of higher rates there. how about the german dax. >> how about it? >> record highs despite the sluggish growth in europe. guess what -- >> the german economy is not doing particularly well. >> central banks are more powerful than economic growth right now, and the more hints of rate cuts, the more the fed leads, others follow. i took a quote out of one of the bank of america notes this morning on what asian central banks are set to do after the fed. if the fed cuts rates in june, according to bank of america, china, korea, india, indonesia, the philippines, we have all the abbreviations for these central banks, i'm just telling you what

they are, thailand and new zealand will likely join the easing camp and cut interest rates around the same time or in the second half of the year. obviously, the fed you most important along with ecb, boj, boe for market conditions. having central banks around the world moving into the easing posture together is helpful for stocks. >> i want to is you something, it came up the other day, i think rick santelli was talking about it, the balance sheet. you were talking earlier this week about the tapering of the tightening. >> correct. >> we're at -- where are we right now? >> just below $8 trillion. >> it struck me where we were at the end of the financial crisis, how much higher we are on the balance sheet and why we wouldn't want to continue to lower the balance sheet overall, in part because, you know, the next crisis could be around the corner. >> so they do want to lower the balance sheet as much as they possibly can. they don't want to do it without having financial turbulence

which is something that happened a few years ago, and it involves reverse repo auction and bank reserves and financial liquidity and taking too much out of the system and creating a bigger headache than they need for markets. they want to manage it in the way that doesn't upset markets. so far they've done a good job. >> they're going to slow the -- they're going to slow it. >> slow the run off of the balance sheet. not yet. they basically said this week they're starting to have that conversation. >> where we are on a monthly basis then? >> not exactly. but, you know, they have basically, to your point, about covid, covid is when the balance sheet doubled. >> doubled. >> doubled. in terms of size. almost $9 trillion. >> yeah. >> and look a lot of people say it was necessary. they saved the system. and this is when the whole world was shutting down and they were able to do that. they will try to trim it as much as they can without causing undue stress. some of the more seasoned fed

officials that have been on market desks at other central banks are warning that we're getting close to having to do that, just given what we're seeing in market conditions and the reverse repo facilities without getting too technical about it. it is something to watch in the months ahead. and -- >> it's so unnatural. it's so large. >> to have a giant balance sheet. >> yeah. >> and you can say the same with negative rates and interestingly, japan exited that world of negative rates. >> this week. >> and now analysts and economists are saying that's a tailwind because the unintended consequences of negative rates are behind japan. another reason to buy. as far as the overall outlook, though, you said it's interesting to see europe rally, despite weaker economic growth. >> yeah. >> and that's kind of been the story from earnings and commentary lately. fedex, for instance, is rallying, but not as much on the demand environment, but more on the margin story and profitability. here's what the ceo is saying about demand.

>> weakness in global trade continues to constrain demand in our international business, which has remained challenged for longer than expected. as such, we're continuing to proactively realign our network to match capacity to demand. >> not a great endorsement of what's happening with global trade. >> no. and to fedex in particular, it was the fact that they did manage to have express margins that were i mean nothing of -- nothing to cheer about, 2.5%, but better than no margins at all, to your point, cost cutting being the key there. >> the driver, yeah. >> the stock up nicely but not as much as it had been in the early going. it looked to be up well into the low teens. that was an interesting reflection about the overall economy. >> not great. the only other chart, since we're on a global theme, the

yuan. the yuan reached a four-month low. it's managed. china has been letting it drift lower, and it has so much so that state banks had to step in to defend it. they worry about capital flows when it gets too weak. it's also a reflection of where the market thinks the fundamentals in china are, and the scope for easing more from the people's bank of china. the central bank, there were hints from an official there's more to do on that front, so when it comes to global easing, who goes first and has the scope to do more. the dollar has been firmer because the u.s. data has been strong. maybe the fed can't do thatmuch on the cutting front. s&p, has been strong coming off its 20th record high of the year. the dow getting closer to 40,000. dom chu, tracking the stocks getting us closer to that milestone. dom, good morning. >> sara, david, an interesting point there, vis-a-vis off allf this, some underperforming trying to play catch-up. longer term, a one-year chart of

the dow, since the october lows that we saw it's been a straight line higher. under performing the tech heavier nasdaq but 7,000 plus points moving to the upside there at 39,715. just a hair below the 40,000 mark. now world war to some of the more heavily weighted in the price weighted dow jones industrial average not necessarily market caps that matter here, it's the higher stock price, take a look at these three names, which have been three of the biggest contributors to the run for the dow since that 30 some odd thousand dollar price mark. over the span over the last six months, microsoft is up 35%. caterpillar, on the global economic cyclical side of things up 33%, and salesforce is up about 49%. it's important because within the dow, microsoft is roughly a 7% weighting, price weighted. caterpillar is about a 6% weighting, and salesforce is

roughly 5%. those are three heavily weighted stocks that are up double digits in that span. as for one of the other ones to keep an eye on, one of the biggest detractors has been the heavily weighted stock in the dow which is united health. over the last six months is down 2.5%. keep an eye on united health. it's been the biggest point drag during that span. of course the two wild cards, if you will, on that technology trade specifically, that we want to pay close attention to, is a new recent addition to the dow jones industrial average, amazon, which was added just at the end of february, but, of course, over the last six months up 38%. its impact, if that momentum continues, could have significant bearing on the dow going forward, especially since february, but apple has been the under performer. down about 2% over the last six months. apple is not nearly the weight that some of these other stocks are, but given the divergence between apple and some of the other tech stocks throughout, it could be a dynamic to watch.

amazon and apple both in the dow, david. i'll send things back over to you. >> thank you. dominic chu. dow as we've been talking about up more than 20% from the lows of last october. and the much more important s&p up 25%. how about that nasdaq. up 30%. so, of course, one question you might have is the market looking stretched? joining us is oppenheimer analyst strategist john, who has an s&ptarget of 5200. what do you do when your targets hit? do you say that's enough, or do you just raise your target? >> well, at this point, david, i can't tell you what we're going to do with it, but it is under review. when we put it in, in december, it was one of the highest on the street, and the people thought we were nuts. we were looking for 13% upside than where we were in december when we initiated that target. then we saw the market blow

through it over the course of the last two days. it will be interesting to see where we close today. but our thoughts are that the funds have improved in spite of an be environment wherein many companies in giving guidance, can be -- it's either management be very cautious on the outlook. the remarkable thing has been that earnings and revenue growth have been a surprisingly positive, as they have been, which has caused a lot of bears to capitulate. probably our biggest worry now is so many bears have capitulated this year, now have targets higher than others. when everybody joins the same side of the boat, it certainly says, we've got to consider what's going on. the fed has been remarkably sensitive in applying its mandate over the course of the last two years, 11 hikes, six pauses, and, in effect, hasn't pushed the economy into a recession. job growth remains good.

profitability for corporations actually positive. you look at the s&p 500. if you consider the consumer, a remarkably resilient even as the pace of the economy slows because -- when inflation is stickier than it is, people get the message and they make alternative decisions. >> youknow, it's good perspective to remember it was only december as you pointed out had one of the higher targets out there, and here we are before the end first quarter having hit it. does that give you pause? when you speak about the fundamentals, where is the multiple right now? i mean, has it sort of kept up with what encouraged you back in december? >> yeah. we were looking for a multiple by the end of the year, probably around 21 times with the market that we were looking for 5200 and looking for earnings around

240. now looks like all that is likely to be exceeded. we're only in the first quarter. anything can happen. i think the most recent lesson was 2022 after 20 and -- 2020 and 2021, try saying that fast, resulted in better results than a lot of bears would have expected. '22, negative pitch book undertook the market with a lot of predictions that didn't actually happen, but dragged the market into a bear market. where we are today, though, we do think the momentum of the fed, and its sensitivity being careful to push, even though i won't say it, careful not to push the economy into a recession, with likely we think cuts in the second half of the year, perhaps as late as the fourth quarter, this looks like a very good environment. the other thing is, the fed has raised extraordinarily when you consider over the last two years taken the band from zero to 0.25

to 5.25 to 5.5, but these are much normal, more normal rates we've seen in the last 15 years because of two crises back to back, effectively what we've got here is more normal rates where bond issuers have to pay for the privilege of borrowing money and bond buyers get something in return. we think that's healthy and we think it's actually healthy for stocks. i've been in this business for over 40 years now and i came in when volcker was in his second term, so we have context to add to this. history doesn't repeat itself. it often rhymes, and we think the fed is doing a good job, the consumers are doing a good job, we'll see where our target goes and know probably over the weekend some time into you keep doing a good job, too, then, john. appreciate your time. thank you.

>> thank you. as we head to break our road map for the hour. shares of nike and lululemon falling sharply on the back of their earnings and outlooks. what investors need to know about these names from here. >> what the justice department's lawsuit against apple means for the company, its investors, and the overall landscape in big technology. we'll speak with connecticut's attorney general one of the states suing apple. and the best tech stock to buy right now. one of fidelity's portfolio managers gives us his favorite ckinhis market. dow down about 99 points. "squawk on the street" will be right back. , i promise to put your interests first, always. i promise that our relationship will go well beyond just investment decisions. it's the intersection of your money and your life where we can make the biggest difference. [announcer] charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com

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bhch. the worst sector right now in the s&p is consumer discretionary. why? two retail stocks on the move sharply lower. look at nike down 8.6% and lululemon down almost double that. almost 17%. so why? both of them actually reported better than expected quarters and both of them disappointed when it came to guidance. let's hit lululemon first because it's moving more. it's the current quarter which is concerning investors and which came in below. that's q1 for lululemon. what they are saying is now expansion for sales of just 9 to 10%, and that is a step down from 16%, which is what lululemon saw in the fourth quarter. it's the u.s. and what they're seeing from the consumer right now. listen to the ceo on the conference call. >> in the u.s. consumer behavior of late and we're now navigating

what has been a slower start to the year in this market. consistent with what we've seen from others in the market the consumer environment in the united states has been somewhat challenging. >> unusual to hear that from lululemon, even in a challenging macro environment, usually their innovation carries them forward into double-digit growth. i think what investors are asking on lululemon is double-digit growth over? the bulls will say it's fixable. calvin mcdonald noted there's opportunity in the u.s. to go for smaller sizes and colors as they target a younger consumer and they need more of that. that's their own misstep. the bears will say competition is finally starting to bite this is category and we were reminded of the competition and the effect in the nike report as well. this has become kind of a controversial stock, lululemon. it's been a high growth stock. >> they've executed so well to your point, particularly on innovation. always sort of another product that becomes hot beyond what you

might anticipate. >> and haven't had to do a lot of promotions and discounts and sales. they've gotten full price. there is a big growth story happening in asia. china sales up 78%. this is a north america company so i think the surprisingly low growth on guidance and also lower traffic, which was referenced on the call, just nods to the macro environment is what surprised investors. let's hit nike. >> let's hit nike. john donahoe was critical of the company and i thought that was interesting on the call as well. i remembered that analyst we had on. >> sam poser. >> this week. >> downgrade. >> so negative. >> so negative and spoke to a lot of what i think donahoe and executives alluded to, there's been an innovation lull at nike. they haven't had any big hits and they've lost share to new hot brands like hoka. if you've seen a deckers chart, it's unbelievable. even you're wearing hoka, so maybe it's jumped the shark.

on running, biori -- >> there's no doubt. >> john donahoe and his cfo matt friend, it was really -- the stock was up. >> deckers owns hoka. sometimes people may not be aware. >> that stock has been parabolic. also ugg is back in fashion and they own that, too. the stock was up after earnings because north america was higher, stronger growth. china was okay. 6% growth without the currency impact. that got it done. but it was the outlook and on the call when matt friend started talking about what they're seeing turned the stock around. listen to that. >> we're prudently planning for revenue in the first half of the fiscal year to be down low single digits. as i mentioned earlier, this reflects near term headwinds from life cycle management of our key product franchises, more than offsetting the scaling of new products as we shift our product portfolio toward newness

and innovation. this also continues to reflect the subdued macro outlook around the world. >> so this was the first time nike gave guidance for what it has its fiscal 2025, what's in its fourth quarter now, expecting 1% growth for this coming quarter, and then the fiscal '25, as you heard from the cfo, it expects lower growth, negative growth, in the first part of that because they're taking some of their styles like air force ones off the -- they're going to cut back on it to make room for new innovation. and that's what you heard nike talking a lot about. they've made a lot of changes. john donahoe has put in place new management including a new design chief in the last year or so. they've been doing layoffs, reducing 2% of their workforce. now their a refocusing and trying to fight back on the innovation front and reinvest in areas where they've missed like women's, like the running categories, in marketing, and

they're talking up the air platform, nike air, as a big reason for that. that's going to be -- it's going to be unveiled at their big olympics show they teased on the call in two weeks they're going to do in paris, but now the onus is going to be on nike to prove it can return to growth with innovation, and it still got the secret sauce -- >> and the brand seems to be a concern, sam poser, who we had on, i mentioned it because he was -- it was unusual for an analyst to be that critical, and he was concerned these are not brand people. >> right. the cto, donahoe himself, they're technology people. >> technology people. >> nike has a lot of brand people and a lot of design people working inside of that company, and he was very negative, not surprisingly this morning, they have to prove they can get back to growth. just on one way that nike is still winning on the innovation front, did you see this, kind of got buried yesterday, they got the german federation soccer team deal to outfit the men and women's german soccer team from

adidas after more than seven decades. >> i did see that. >> so they're selling something right to the consumer on the innovation story or adidas is just not getting it done. >> they haven't been getting it done. >> they have not. bitcoin, just holding on to gains for the month after a tough week for cptryo. more on that move when we come back. power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis,

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welcome back to "squawk on the street." rough ride for crypto this week with bitcoin and ether down 9% or more. that said bernstein is still bullish raising its year-end price forecast for bitcoin to 90,000 a coin to bet on bitcoin mining stocks, clean spark and marathon digital. i don't know how they come up with price targets for bitcoin, but i guess the supply and demand story is real. >> i guess. it's about as much as i'll offer on bitcoin. >> dollar was strong this week. maybe bitcoin went lower on

that, although that correlation is not perfect. >> what was gold doing this week? they were moving up together too. >> gold was -- i don't know if gold did a lot this week. i'll check. >> overall commodities as you pointed out -- >> have been firmer. >> strong. including copper apparently which now the data center, there's a data center theory on. they need more copper. >> we need more copper. >> freeport, richard ackerson said we will have a copper shortage. >> he was on with you yesterday. yeah. >> finally stepping down. >> i know. >> i know. >> good man. still ahead, how strong is the government's sweeping new lawsuit against apple and what does that mean for the stock? we're going to break down where things stand with one of the attorney generals behind the suit.

welcome back to "squawk on

the street." i'm bertha coombs with your cnbc news update. the u.s.-led effort to call for a cease-fire in gaza failed in the united nations security council vote this morning. russia and china, who are permanent members of the council along with the u.s., voted against the measure. the u.s. resolution called a cease-fire imperative for the protection of civilians and expansion of humanitarian aid deliveries. russia added the lbgt movement to a list of extremist and terrorist organizations. the addition means people tied to the movement could have their bank accounts frozen. the list already includes members of all of al qaeda and u.s. tech giant meta, among others. the move today came after russia's supreme court ruled last fall these activists should be designated as terrorists. stellantis is recalling nearly 318,000 dodge and

chrysler cars because of issues with their side airbag inflaters. in documents posted today by u.s. safety regulators, the automaker warns the inflaters can explode with too much force and send pieces of metal flying at passengers and drivers. back over to you david. >> thank you. bertha coombs. let's switch gears back to apple and the fallout from the doj lawsuit yesterday. the justice department assistant attorney general was a guest on "squawk box" this morning, and he weighed in. >> consumers, if you ask them whether they want to pay less for their iphone the answer will be yes. if you ask developers if they want to pay those reach users on the iphone the answer is yes. if you ask banks whether they want to pay additional fees for credit card transactions when people are tapping to pay inside a retail establishment, the answer to that will be no. competition leads to lower prices for consumers, lower

prices for developers, more opportunities for entrepreneurs, and ultimately more innovation that benefits society. >> connecticut attorney general william tong joins us at post nine. connecticut is one of the states that is suing apple. nice to have you. >> good morning. >> why did you choose to join the lawsuit? >> to protect consumers. i think what assistant attorney general cantor was talking about are what we call monopoly rents. i have two of these and i have a broken camera lens which means when i have to get a new phone, i may have to pay $1600 for a new phone. it's because we're so dependent on these devices and the ios ecosphere and ecosystem we're essentially captured by apple and forced to pay these monopoly rents and pay more for devices and for services and programming than we should have to. >> samsung would say we'll sell you an android phone and happy to do so. >> samsung doesn't have 70% of

the performance smartphone market, 65% of the overall smartphone market. i mean, really does anybody not think that apple is dominant in the smartphone and mobile computing space? >> they have a very large, important market share, but, you know, it's only because, they would argue, they deserve it because they provided the best product. >> yeah. >> they provided a product that people are delighted by, and whether you say it doesn't work well with another smart watch, yeah, because they developed the smart watch that goes with it, and it doesn't work well with a digital wallet from somewhere else, because again, they have innovated to the point where people like the product. >> i love apple products and we're an apple family. there's nothing wrong with great products. what is wrong is using your monopoly power, the sheer force and weight of a $2.5 trillion market cap company to stop people from switching, to create a competitive moat around consumers, right, to stop developers from getting access to your application programming

interface so you can offer choice to the consumers, right, to stop -- to have the green bubble, for example. if you are an iphone user and you communicate with an android user those texts come up as green bubbles and the videos are grainy, no encryption. the messaging isn't as reliable. those are impediments designed to maintain apple's monopoly. >> what do you want to see them do to remedy this? >> i want to see apple change its corporate strategy from trying top stop competitors and trying to stop developers from trying to open up the ecosystem and trying to keep users and trying to stop users from having choice in the marketplace. stop that corporate strategy, stop using your huge weight and competitive -- >> on the phone? on the hardware side of things? >> i think it's the whole

ecosystem. if you depend on the phones you depend on ios and all of us depend on this for our lives, we can't live without it. >> it's going to be years until we have the answer here. >> that depends on apple. if apple wants to come to the table -- >> do you think they would set until you pointed it out, it's $2.6 trillion. they make over 100 million a year. they compete with the u.s. government in terms of resources to spend endlessly on their case. >> i was on the show talking about our case against google and the ad tech case. we've sued meta. taken on amazon. we settled a massive litigation with the major drug distributors and the opioid and addiction industry. we can move the needle here and when apple is ready to come to the table and talk i'm ready to talk. >> you don't whe chilling effect these kind of actions could have on innovation and getting great american companies like apple and google that europe would kill for, but their regulatory environment is worse than ours? >> i'm not worried about it at

all because we've seen this movie before. 20 years ago we went after microsoft, the department of justice, and 19 states, because we had to open up that ecosystem, the windows microsoft os and internet browser system. at that time apple was on the brink, right, of going out of business. if we had not taken action against microsoft a generation ago, apple might not still be here and there probably wouldn't be a google or a facebook. >> yeah. it's been interesting to see kanter draw that line at least in the actions previously that the innovation that occurred as a result of apple. that said, you don't feel like penalizing these companies for being so successful? >> we're not. what we're doing is making sure that consumers have a choice, that if you want to use a different digital wallet and tap to pay, you don't have to use apple's wallet, right. if you want to do cloud, if you want to use the cloud for gaming, for example, that you don't have to buy a $1600

device, that you can access -- >> $1600 because they would say that the capabilities and the technical factors in there are far superior. >> and i would say that their margin on phones is double the industry average. ask their competitors. >> people are willing to pay for it. you get the margin you can possibly get. that's the whole idea of capitalism. >> but it's against the law to use your market power and your monopoly power to maintain your monopoly and against the law to build artificial barriers to keep developers out, to shut down and hurt competitors, and to restrict consumer choice. that's against the law. there's nothing wrong with selling products. there's nothing wrong with innovating. we love our products and we love innovation. you can't step over the line as we know that apple is and as part of your corporate strategy go after and kill your competition and stop consumers from having the choice they should have. >> attorney general tong, we probably will be able to discuss this for years to come, perhaps, unless an unexpected settlement. >> i hope you have me back. >> we will do so.

>> thank you so much. apple shares well into correction territory, they're down 10% from recent highs but our next guest does not think the doj lawsuit changes the bull case for the stock despite the headline risk. dan ives, wedbush, has an outperform rating on the stock, $250 price target. why are you not worried about what you're hearing from the connecticut ag and the department of justice? >> yeah. first of all, he does a great job in connecticut and i think they raise great points. our whole point is, the business model for apple, we believe, is defendable. i think as they go through this, we do not see the services as a risk. i think right now what's reflected in the stock is worries they have to from a commission perspective, they have to change their business model. they've defended this before. we've talked about a scenario analysis. i'm not saying they're not going to come out unscraped, but i believe what's baked in here right now is 20, $30 of, you

know, my opinion -- >> at the very least people say it's going to be a big distraction, and to david's point, it's going to take a lot of time a lot of effort, a lot of meetings with lawyers and regulators, and that ultimately could be painful for a company, couldn't it? >> i think it could be painful. no doubt hand holding yesterday, there's a -- but if you go back to microsoft when i covered them in the '90s, i think the biggest mistake they made was ultimately being distracted, not being aggressive. i think gates would say that. that's one of their biggest regrets. when you look at apple i think they're going to double down and introduce ai at wwdc in june. we talk about that. they're not n my opinion, going to back away. i view this as more bark will be worse than the bite, but at one point they will have to get to a point where they settle in a fine or ultimately go down some path, business model tweaks, but

they will defend this moat. >> technology changes so quickly. that's the other part of it. it's hard to anticipate what the world is going to be like if and when that day comes. speaking of which, though, investors continue to look for a catalyst here that's going to move the stock once again higher. you keep pointing to june. what was your reaction to the story about the gemini chatbot used perhaps as sort of one of the ai engines on the phone? where are you in terms of how you're thinking what they will tell us come june? >> i think that's a smart strategy. that's an already fully built product. validation for google and gemini. i believe it's a dual path in terms of the app store we view as an ai app store, subscription based model. they will have their own llms built in. look at what xwgoogle has built that's smart to partner with them and look going forward openai could have been in there

as well. this is not the time on the outside looking in. it's time to double down and i think the ai strategy, units starting to i believe at least start to get back to growth in china, cook is in china this week, that's not coincidental. that's another showing we are not leaving china. we're doubling down. >> the ai moving to the device, that's going to motivate people to buy the next iteration of the iphone? >> 270 million iphone users that haven't upgraded in four plus years. that's my focus fundamentally even though what we saw with the lawsuit is an overhang. >> dan ives, good to gate get your take on this. more top tech picks for your portfolio. stay with us.

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thousand times every couple years we'll be coming up with something so much more incredible. our next guest helps manage over $20 billion in technology related stocks for fidelity. joining us investment tech portfolio manager adam benjamin. good to have you on. you've been in a nice space litly. the fidelity semiconductor portfolio has benefitted from a 28% weighting in nvidia, but it's always what are you going to do for me now? we've heard from micron and jensen huang a lot. give me your take overall in terms of where things stand because of the advances when it comes to generative ai? >> sure. thanks, david and sara. thanks for having me on. as you point out, that's how i think about things. it's all about going forward. it's from here in terms of our portfolios and how we're thinking about sizing position and relative risk-reward in the names of those portfolios. you know, as it relates to semiconductors in general, you

talked a lot about generative ai. it's got a lot of focus. everybody knows about it, gtc wassing was -- was a big event this week. there's more than just generative ai, right. you've got the cyclical dynamic that's been massive due to covid. you had the shortages and then the oversupply and we're kind of coming through that. you add in the whole geopolitical overlay, it's made semiconductors probably the most interesting space you've seen in 20 plus years in terms of people thinking about domestic supply, how to, you know, make sure you have assurance of supply across all geographies, and different dynamics going on across all of these other end markets from pcss to autos and smartphones. so i do think overall, ai will have a big overlay. we're seeing it, you know, dramatically in the cloud and data center space and infrastructure that's going in there to support a lot of the training of these models and

inference over time. you're going to see a reimagination of all these end market, all these end applications from pcs, smartphones, and even, you know, things like, you know, auto as well as your -- even your microwave in the sense that to adopt ai, you're going adopt a. computing power, you're going to need more memory, more power management. so, it changes, you know, the design and redesign of all these applications. >> and that reimagination that you talk about, give our viewers some sense as to what they can expect. i know it's not tomorrow or even the next day, but it's going to be here soon. >> yeah, i think that's the way to think about it. this a.i. problem of all these tech trends i've been following for 20 plus years, this one is really hard. it's going to take time. people have to be patient. this is not going to be a straight line. there will be bumps along the way. what i would say to people is

think about this technology and innovation and the challenges associated with it that they need to be patient. but you're starting to see certain applications. obviously, microsoft's co-pilot, a couple other productivity tools are being rolled out, but you'll see more and more. clearly there's a lot of conversation about a.i. on the edge or doing it locally with a pc or smartphone. i think that's going to take time. so, overall, i think people need to be patient with this trend, but it's -- as i like to say internally, a.i. overall is probably underhyped as a technology. some of the stocks may be overhyped or anticipating some of this trend maybe a little too early and the fundamental benefit may take longer than people think. >> i'm just wondering how you pick the winners and losers. obviously you like nvidia. i don't see in the top holdings an amd, for instance. i see a microsoft and apple in the technology fund but not an alphabet or meta, which are

thought to be a.i. stocks as well. how do you choose? >> yeah. so, think about it this way, right, if you look at last year, the a.i. basket, if you look at broadly diversified funds, it's loosely named. it's about 50 plus percent of names have some a.i. exposure or put in that basket. a lot of stocks worked. we've been looking at a.i. since 2017, '18 with the benefit of looking at private companies and seeing this, following nvidia and where they stand as not just a chip company. clearly, this is a full stack software network solution. that gave us a good insight as to where this is going. what i would say is going forward, we're starting to see a separation, right? we're starting to see companies that were perceived to be everyone's a winner to now you're seeing that separation in 2024. in intel, for example, was viewed

as potentially a winner. now the stock after being up 100% last year, down 15% this year. people are starting to differentiate who are winners and losers. that's really our job. we're trying to be early. as david indicated, we run a pretty large asset base. we have to be early these trends. we were early. we continue to track the evolution of a.i. and i think there will be several phases to this that we need to be thinking about. >> well, we look forward to having that conversation with you over time. hopefully you'll join us again, adam. got to stop there for now. thank you, though. >> thank you for hinmeavg . we will be right back.

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the heads of the nation's largest airlines want a sitdown with boeing. phil lebeau has the details. like getting called into the principal's office, phil. >> they're directing it from the board of directors. this will start next week at various headquarters for u.s. airlines. larry kelner, chair of boeing, along with some board members will be at each visit. ceo dave calhoun will not be included in any of these visits. the airlines have been asking for these boeing meetings.

they all wanted to go together. boeing said, no, we'll come to you with some board members. they're frustrated with boeing, with the delays, with the manufacturing problems, the long list we talked about at length. for larry kellner has been the boeing chair since 2019. this puts him in a tough spot where people are saying, they want concrete steps from boeing. it cannot be at the edges. as you take a look at shares of boeing. keep in mind that dave calhoun, and we're going back to when he was named ceo, that's the chart you're looking at here, he says he supports these meetings. we'll see what happens over the next week. back to you. >> phil, thank you. phil lebeau. a lot more live market coverage for you and a lot more sara eisen. >> with david faber. can't beat that.

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good friday morning. welcome to "money movers." i'm sara eisen with david faber live from the floor of the new york stock exchange. stocks coming off yet another record close to the fed's messaging provide all the fire the bulls need to keep the rally going? hsbc's ryan wang with us on why gdp could be the key data point to watch from