the fed and the way that treasury yields are moving, now we we've got central banks moving in direct direction. >> liz, thank you. a quick check of the market before he hand it over to our friends at "squawk on the street." s&p 500 off by 41 points. i'll see you from kiawah island with steve cohen. be sure to join us. "squawk on the street" begins right now. good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim f cramer and david faber. ten-year 4.38, oil eclipses 85 for the first time since october. our roadmap begins with these market worries about dates. the fed might hold off on a june

cut. >> also ahead, a rough morning for health insurers. medicare investment rates come in short of expectations. ge shares have been up sharply. the company now completing its final split by spinning off its power generation business. ge aerospace ceo and larry culp and ge fernova scott stray sikh joining us a little later. we mentioned the ten-year going back close to 4.4. this started with the ism data yesterday. >> it's constant. you look at it, just drips and drabs. the market is reacting in a curious way. yesterday the nasdaq finished up. i thought that was incorrect. these are the stocks that should be getting hit, david. i do think this is a very important moment in the market because we had for dot ten about

ra rates. >> well, we did yesterday. a mistake for the nasdaq to be up? what does that even mean? >> i mean if rates go up, you want to sell the high multiples -- >> you also want to keep an eye on the companies that have a debt stack that needs to be refinanced. there were hopes at the early part of the year there would be a lot of rate cuts and the refinancing risk was lower. any number of those highly lefrd companies -- >> you're going to need the economy to stay strong, but that also means you won't get the cuts that some are hoping for. i never believed in the cut theory. i think the economy is really strong. i guess those guys, they wear tommy hilfiger, that's the only thing they do. >> we'll get to some -- >> -- it's astounding. that was a biden shutdown. >> the rates are one part of the

picture, jim. the markets pricing in fewer cuts than the dots. whereas before we were pricing in double suggested by the dots. ukraine struck one of russia's largest refineries. iran is vowing revenge for th attack at the embassy in dough mass cuss. >> there are states in the gulf building nuclear power plants. i think oil could go a little higher. there are good strategists that thinks it goes to 100. natural gas is lower. gasoline is up. i don't want to emphasize too much that's going on. we know it could be ephemeral. >> this note suggesting putin could put the squeeze on biden prior to the election by taking oil to 100. >> they took out a lot of

ukraine capacity. i would say we actually have the exact right people on, vernova is actively involved in ukraine. we're going to find out. i think it's important. >> back to carl's point -- buying russian oil. is that correct? >> that's correct. >> it's a global commodity. if you cut it off in one place, it doesn't necessarily mean that -- it's going to have an impact. >> russia and the axis of non-evils, india building a huge number of coal plants. china building a coal plant every two weeks. >> a lot of it is for backup. they are by far the largest producer of solar as well. >> let me give you a little heads up, partner. april 8th. april 8th, total eclipse of the

sun. worst day in the world for solar power. >> i was like, where is he going with this? >> yes, on that day you're going to need your coal. >> april 8th is a disaster for the solar -- >> the chinese do build a lot of coal plants, but it is said that they are also very heavy -- look at their electric vehicle industry, by far the largest. >> they're going nuke. >> who is going nuke? >> china is, trust me on this. i have sources. >> trust you? you with sources in the chinese government? >> i have great sources on this. david doesn't understand, when you have an interview like we have this morning, you've got to go the distance. >> jim is referring to ge vernova. >> ge vernova is interested in small, modular reactors. i think it's very important. david, i'm surprised in you. you've been one of the most

praised proponents of nuclear. >> i have talked about it without a doubt being necessary, taking us through the transition. >> more people died with nuclear power than with coal? >> we know it's a history that makes little sense in some ways in this country. three mile island essentially. >> chernobyl. and then fukushima. >> but we only had one here in this country. it's operated quite safely. there is a concern about the waste product. you're right. the smaller reactors could be fascinating, particularly given the power needs of the thing we talk about all the time which is the growth in generative ai. >> double-digit growth. >> what are you going to do? >> i'm not trying to be too ge vernova centric. but this is an amazing day, an important day because we had a grid that nobody ever cared about.

we had no sense that wind could be part -- >> demand has been stagnant for a derk cade. >> actually for a hundred years, you can argue. i think we kind of forgot that data centers are the greatest source of technology. oh, david, what? >> we got the tesla numbers. >> the stock is down 6%. >> phil has got the numbers for us as well. you want to do that? what do you think, jim? i want to check with you first. phil, take it away. give us the tesla numbers. >> these are not good, that's why the stock is down. deliveries in the first quarter of 387,000 vehicles. let me put that into perspective. the facts and consensus as of friday, was for 457,000 vehicles to be delivered. first quarter of last year, the company delivered 422,000. so this is a year-over-year decline, the first since 2020 that we've seen from tesla.

in terms of production, the company produced 433,000 vehicles. they do point out the fact that they had the change in the ramp up in production in fremont as they come up with the new model 3 highland edition. they also had the red sea issue, also the issue with the production at the giga factory in berlin. not said by the company, clearly one of the main factors what's happening in china. we know what's happening there as they have lowered their production. we've seen the announcements or reports come out of china, and that clearly has an impact here. that's why the stock is under pressure you see now. again, 387,000 vehicles delivered in the first quarter. the street was expected 457. even some of the bearish analysts were expecting 410, 415, not 387. guys, i'll send it back to you. >> i was going to say, phil, full-year estimates, i guess we can say goodbye to some two

handles, right? >> i think that's a given. i think that's a given. most were already bringing them under two. we had a few saying 1.91 million deliveries for the year as the estimate they were putting out there. for some perspective, and i don't know if we can pull up the chart we have, showing annual deliveries, they delivered 1.81 million vehicles last year. if they were going to go to 1.92, 1.93, that would be about an 8% increase in deliveries. now the question becomes do they hit 1.81 million? is there a possibility they don't even make that. that possibility is out there, but it's early and a lot of things can change. obviously production is likely to come back much stronger and deliveries should improve in europe. they've been clearing out a lot of inventory in the first quarter. if things start to firm up a bit, then certainly we expect higher numbers in the second, third and fourth quarter. to what extent remains to be

seen. china is the wildcard, guys. they are brutally competitive in terms of what's happening with evs and ev pricing. there's no doubt that's having an impact on tesla. remember, shanghai is not just where they supply china, but that's also where they supply other markets around the world. so they can offset some of the impact of just pure china and the competition there in terms of vehicles being shipped to other markets out of the giga factory in shanghai, but there's no doubt this competition in china has had an impact. >> phil, i know that the united states is not the fulcrum, it is china. and i know the problems in berlin. this new-found we don't want to go electric, we want ice. we also are willing to have eye brid in this country. >> americans are embracing hybrids right now. >> if you're someone that wants us to electrify and get off

of -- go to nuclear and get off of coal and get off of nat gas. it's not going to come together at that level. >> no. but that's not how consumers think, jim. i think there's very few people in this world who sit there and think, ultimately it is the fuel source for this. a coal burning plant, is it nuclear, is it hydropower. that's not how consumers think, you know that. the way the consumer thinks is, what's the best option for me pricewise and also am i comfortable making this transition? there is no doubt that the recharging issues in this country are a huge issue. the first adopters, they could live with it. not the people who are now looking at buying a vehicle now. i hear this time and again from my friends who are considering buying an electric car. almost all of them say the same thing. if i'm in chicago and i have to drive to cincinnati, st. louis, i ain't doing it in an electric

vehicle. >> all i could think of is what happens on 95. am i going to push to a rest stop? >> phil, the company reports april 23rd. we'll get a lot more details then in terms of price cuts, what's meant for underlying cash flows. you mentioned the production out of the shanghai factory. give us a sense in terms of your expectations where the chinese can come in with vehicles priced far below what tesla is able to do. >> not only are they priced below what tesla is able to do for electric vehicles for the most part, because of the advantages they have in terms of scale, in terms of labor costs in china, but on top of that, david, when you go to a place like chile, the thing you notice is the internal combustion engine vehicles, 4, 5, $6,000

cheaper from a chinese automaker compared to a comparable vehicle. we compared one from great wall versus toyota. they're both mid-sized suvs, no comparison at all. when we talked with consumers, they said the same thing. it's pretty good. why wouldn't i buy it? it's $5,000 cheaper. that's the competition that not just tesla but all automakers are facing. in terms of evs, yes, tesla is king of the hill in the united states and was king of the hill up until the fourth quarter with byd. full-year numbers i think byd probably passes them this year. they're still very formidable and have a lot of advantages, but they are facing a period here where they've got to deal with softness in a number of key markets. >> phil, you're right. we'll get to the rivian numbers we got this morning. that's our phil lebeau on tesla's disappointing q1 delivery. the disney-mrepeltz proxy

battle. ceos of ge will join us. we'll get to some of the m&a and oil services today. m ntnehethnserjimeiod al iurs when "squawk on the street" continues in a moment.

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we are going to have a sharply lower opening about 13 minutes from now. that board battle at disney continues. try an's nelson peltz trying to get on the board. voters have until the end of the day to submit their votes.

disney, among some of tlarjest holders, t. rowe price, they're voting in favor of disney. "wall street journal" reports blackrock also siding with bob iger and his board of directors as well. they did withhold on mark parker. i thought that was interesting. i've been saying this for weeks, a lot of confidence in the disney camp. that continues. it still may be close. don't forget, shareholders can withdraw and resubmit until the deadline. that happens occasionally. so there is still lobbying to be done here. we still have yet to hear from state street, vanguard, the huge index and/or passive funds that have such an impact on votes like this one. retail also important. disney confident on the retail vote, some 40% or so of the shares outstanding considered

retail investors. inside disney, they believe they can get as many as 75% of those. jim, you have to say right now iger is going to win this one, but we don't know yet. it's still too early. these reports about 50% in, again, you can pull and resubmit until the deadline. >> what are you hearing about the cost of this to disney shareholders? >> the costs are running high. >> the highest ever. >> on both sides. >> the tryian side, if we see this money might have been better, making movies that sell. >> 40, $50 million. >> most expensive proxy fight ever. >> i think that matters. people have to recognize, maybe they should say let's have him in, he can't do $50 million worth of damage. >> well, they felt otherwise clearly. by the way, it's not just money. it's time. i mentioned this for so many

years here in terms of these kinds of fights. the distraction for management, the time spent -- you're spending it with shareholders. so conceivably there's a good that comes from that, from sitting down as bob iger did with so many large shareholders. there's a lot of distraction that comes with it. >> what are the odds they do something like proctor did? minus 10? >> not a chance. there's a great deal of vitriol here. everybody is taking it very personally. we're going to be able to stop talking about it very soon. >> i think even when you talk about it, say like i talk about it, i'd rather talk about minnie, maybe goofy. >> bring goofy back. >> someone compared me to goofy. >> somebody has compared you to basically every cartoon character. >> except for thumper. >> how about bambi? >> bambi's mom. >> woody woodpecker, yes,

thumper no. >> as we said earlier, larry culp and scott stray sikh joining us to discuss general electric's final split. one more look at the premarket. more "squawk on the street" in a moment. encore energy, america's clean energy company, now in production in south texas. energizing america with reliable and affordable uranium for nuclear energy fuel from our environmentally friendly extraction process. encore energy. we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy!

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six minutes until we get started with trading here at the new york stock exchange. looks like we're going to be down sharply. for mad dash, you want to talk about paychecks. >> it may not be enough. paychex is down huge. they guided lower. a lot of this, david, is actually business is soft. you start putting these things together. pvh business is soft, paychex business is soft. maybe we're missing something. maybe there is a slowdown developing just when rates go higher. this is a suboptimal situation, david. you want to see paychex continue higher. >> right. you have ceo on a bunch. >> we have the ceo on tonight. thank you for that prep job. this has been the engine of the economy, small and medium-sized

business. to see that tail off would be something counterintuitive versus what we thought a couple months ago. >> i'd be curious to hear what he has to say when it comes to characterizing that. >> paychex's wheelhouse is the united states. there's a lot of talk that there is a bit of a frugality developing with american business. >> okay. rate cuts maybe are needed. more and more prognosticators eliminate their expectations. >> right, underneath, when you have apparel and a company -- drink linkage to small and medium-sized businesses and they missed the quarter. >> opening bell is just a little less than five minutes away. don't forget, of course, you can catch us any time, anywhere by listening to and following the "squawk on the street" opening bell podcast.

after 130 years as an industrial icon, it is the end of an era at general electric

today. the company completed its final split by spinning off ge vernova power business which will trade under ticker gev. ge aerospace will retain the ge ticker. that company's ceo larry culp and vernova ceo scott strazik will join us shortly after ringing the opening bell. >> i think it's sound. the reason i say that is i still think the company has the zeitgeist of the country. people want power, they want aerospace. these are very good trends. the ge healthcare deal has worked. mostly -- people gave up on this company. they gave up on it, and they gave up on it to buy. larry culp came in and said, look, it may not be so good -- culp was money, david, money. >> he was. the early days were a little

tough. remember, they announced this plan to split up in november of 2021, and here we are. >> when this division was the weak link, and larry culp promised investment, they bought it. this is a very big deal. very important. [ bell ringing ]. >> at the big board, ge aerospace and ge vernova. we'll talk to culp and strazik in a few moments. jim, ten-year crosses 4.4. >> people have a real problem on their hands. a lot of commodities going higher. a lot of companies saying things are weaker just when we had the fed not cutting. something has to give or else we're going to have -- as i said

yesterday, a sell. >> we got overbought. this is not a great moment. that's what i thought the nasdaq, when i thought it was down, get it over with. it looks like it's going to be a prolonged decline. >> not a great moment. you want a 2% drawdown before we get too dramatic? >> i know it's been since october, the end of october -- >> as bofa said yesterday, the 98th percentile going back to the '30s. >> let's have a little bit of a rollback, nothing serious, but let's have it. in part because we did not expect that rates would be anything but tame. it's kind of shocking. came in yesterday and said, oh, we got pce on friday. good, let's focus on stocks. no. i've been thinking about the oil situation. you do want it to stop here. we'll talk to these guys. i just feel rates have to stop going up. they have to, to end this, they

have to. i know it's very little selloff, but it could snowball. like the pbh, that was one of the hottest stocks in the market. now you've got ralph lauren that's really hot. is it so hot? i don't know. >> the pvh seeing q1 revenue down 11%. stock was down 12%. >> the only buydown that might be worse is the humana situation. >> we mentioned at the very top, but we should get to it. in terms of medicare advantage. now you've got downgrades to humana, not helpful. the underlying theme is the same which is deteriorating rate environment becoming a risk to all the estimates for all of these companies because, jim, it was unexpected somehow that rates provided by the u.s. government would be lower than perhaps had been anticipated. >> i don't know what these guys were thinking. did they really think -- humana

was so far wrong. they thought maybe 5% rate hike. they got 3.7. carl, in this election year, are you going to give the seniors a 5% increase in how much they have to pay formedicare part d? no. but these guys in that industry -- look at united health. they have a giant hack on their hands, and now they have this. that's a dow stock. these are rockbed companies. this was a shock to them. >> tanl lift at bofa says in a rational market insurance companies can always price back to a target margin. however, with reimbursement and utilization pressures heating up -- remember, they had huge utilization at the end of last year. >> post covid. >> the amount of benefit cuts needed could begin to weigh on the perceived value of medicare advantage. >> i know i'm the only one who perhaps avails themselves of this here -- >> at least for now. >> for now.

>> had to get cipro for my ear drops at cvs. the woman said $193. i said i'd rather not have that medicine. let me see the formulary. people in this country pay a lot of money for drugs if they're not on the formulary. even with the part d, wow. so the idea that you're going to get ripped off and have this thing go up i think would have been devastating for biden with senior citizens. this is a very important decision -- karen lynch was doing such a great job at cvs. suddenly huge setback. aetna -- humana was in talks with cigna. >> shareholders at cigna are very happy that ended up not having. reported to have been in talks by the journal. i reported at the time significant opposition of large shareholders from cigna. obviously those talks did not continue. >> how lucky is that?

>> that was a good move. remember, let's not forget at the end of last year -- they ran into headwinds as a result of more people going in for inpatient. >> do not forget pickleball. >> your achilles. >> that's right. you think pickleball is not a contact sport and you're okay. >> i played pickleball this weekend. i can see how it can screw you up very quickly. >> pickleball is actually mentioned. i'm not making a joke. >> a famous ubs note. >> true. the cohort can be older. you are not as limber as you thought you wanted to be. >> you're not allowed to serve hard. he served hard, i know. >> i may not keep doing it because i think the risk of injury is high. >> safer in the water. >> safer in the water. health care and tech are down 1% plus. the only positive is energy.

we didn't mention champion x. >> that was an interesting deal paid a lot of money -- >> not money. sales. >> slb requiring champion x, .735 shares of slb, if you're a champion x shareholder, together you'll own 9% of the outstanding shares of the combined company. jim, i'll let you explain -- >> it's up stream. it's technology to measure the reservoirs. something slp did not have. they said some good things about their business. slb is such a good company. they did not screw this up. even though hey had russian exposure. championx is a good company. i think slb should not be down that much even though they

issued a lot of stock. >> or will issue a lot when they close. >> yes, very important. >> interesting winner's list, ge aerospace, comcast. >> no, no, no, that's not true. >> only because comcast was down 3.5% yesterday on the downgrade. >> david, you have to say it. what is comcast? >> the parent of our network. >> we had an upgrade of eden, i believe. >> eden is a company in the wheelhouse of the company we're going to be speaking to. that guy had a sell. i think that guy -- he's been unbelievably. >> barclays goes to equal weight. >> that was supposed to be funny. >> setting larry up. you can't talk to him yet. >> just making a joke about what chance said when i made a joke, very funny, super funny. anyway, we do have an unbelievable opportunity to ask about all the stuff we've been

talking about except for humana. >> a couple of the other calls we mentioned, sit sti cutting clorox and upping el. >> they said clorox -- all you'll get from clorox is basically done. you're going to take clorox at 200? that was silly. there have been a lot of silly calls. what i want are calls that recommend ge and ge vernova. we better start getting those. general electric completed the file split. joining us now in the cnbc exclusive ge aerospace chairman and ceo larry culp and ge vernova ceo scott strazik. let's talk about what the businesses are.

larry, i'll give it to you first. where was this business four years ago, and where is it now? >> well, if you look at ge as a whole, jim, four years ago, five years ago, prepandemic, we had a mountain of debt that was holding us back, and we were really in need of an operational turnaround. i think that's what you see today with the launch of an independent ge aerospace and ge vernova. on the other side of $100 billion in debt reduction. set these two businesses up as we did ge healthcare on a strong financial basis. what we've done operationally is not only more than quadrupled our free cash flows, but driven $190 million of market capex pangs that we've seen since the dark days of 2018. >> we have to congratulate you. american business's finest hour. scott, you've got nuclear,

hydro, steam power with gas. you have the second largest business is the wind segment, doing incredibly well. then you have the smallest but the most exciting i think is electrification. how are you going to divide your time and resources? >> the reality is the world needs a little bit of all of these technologies. as a purpose-built company to electrify and decarbonize the world, it's going to be across those. our power businesses do electrify the world today, generate a lot of cash flow, will for a long time. we've been focused on wind because we've been in an operational and financial turnaround of our wind businesses while the industry really is improving itself. electrification and investments in the grid is the most exciting part of what we have. for every dollar invested in power, you have to spend $3 investing in the great today to make the system work. >> grid is a lot of software. >> yes. >> there's a level of technology that's involved to make it so that, if this data center

revolution occurs, we have to make it so all the sources we have can go and give her all she got. >> no question. the reality is the bidirectional flows of electrons coming back from solar panels on roofs, ev chargers and the very nature of power, it's a complex system, but one that does need software solutions. that's one of the fastest growing parts of ge vernova. >> i want to get back to larry on aerospace, but let's continue here for a second, scott. when you talk about business improvements that have led to a sub segment profitability in wind, what are we talking about? what have the improvements been that i assume you can continue to build on? >> you bet. we've had to slow the game down for the team. a lot of that comes back to underwriting focus markets. work horse products, real products we can industrialize at scale. applying similar principles to offshore and a business and a part of the energy transition that's critical. wind only generates 7% of the

world's electricity today. we need to be 25%. it's only going to get there if we industrialize things at scale. that's whatwe're focussed on. >> larry, viewers may not be aware, unless they take a look at a chart, ge stock is up dramatically since the middle of 2022. the multiple has also expanded a great deal, meaning there is a belief that you're going to be able to grow cash flows, ebitda, how ever you want to measure it at a higher level than previously the case. is that going to be the case? if so, what's behind that? >> david we were here a few weeks ago previewing the ge aerospace financial profile over the next five years. we were talking $10 million in operating profit in 2028. we sit here today as the growing leader in propulsion both in commercial and military applications. we're in a tremendous up cycle on both sides of the house, working feverishly to support the airlines with their

installed fleets today. departure up 9.6% year-over-year on our install base as of this morning. that coupled with the ramps that all majors around the world are looking to see given not only modernization but expansion efforts on the part of the airlines sets us up tremendously into the foreseeable future. >> we mentioned, larry, the piece in the journal today. we get thooes think pieces every now and then about the era of the industrial conglomerate at a time when investors want pure plays. do you think that pendulum ever swings back? >> carl, i don't know. i think we're really here focused on ge. five years ago we knew that we could be well served by more of a decentralized approach to running the businesses. we didn't really have this day in mind, on hostly. we knew if we were more focused, focused externally, on the

customer, we'd drive better results. what you see today are three ge offspring, operating very much in that way, delivering better results, both for customers and investors. >> one of your comments to the journal was when you came in, some of the challenges were plain to see, others less so. i wonder which were less so. >> i think there was a lot we needed to do operationally to be able to turn things, again, both for the customer in terms of quality and delivery, let alone for the investor. scott and his team, the aerospace, the health care teams all were at it hammer and tong, day in and day out. we made a lot of progress in '19 and '20, but then we were hit by the pandemic. clear of that, i think you see what all three of these businesses are capable of. carl, those best days are ahead. >> such a focus on getting the operational kpis right for the

customers in the near term while still protecting for investments in a long term in an operating system flywheel that really works, that to me is why i'm so excited where the businesses are going. vernova is still in the early days of getting that leverage. >> let's talk about both wind and small nuclear reactor. the president wants 30 gigawatts from offshore by2030. first i want to ask, do you think that's even possible? second, by 2030 do you think we'll be building nuclear power plants in this country? >> with small modular reactors, we'll commission the first in canada with ontario power generation in 2029. we're working right now with tennessee valley authority with permitting to do something similar in this country. it probably will be the next decade. small modular reactor will play a role. we need to triple nuclear capacity in the world, but we need to do it with something

that we can industrialize at scale that's the exact same product over and over again. >> and wind offshore, i'm concerned about it. the overruns have been terrible. i'm concerned about whether you can make wind numbers. >> we are. what i'll tell you is i'm more encouraged with where we're going with offshore wind now than in the two years i had the business. for this reason, the market is resetting. we're starting to drive towards better economics, better pricing that are representative of what this product provides to the world. offshore wind is going to matter. it may take a little while for it to reset. that resetting is happening in which it's going to play an important role in the energy transition. >> you also are very much involved in what i regard as high conflicts. what are you doing in ukraine when the russians bomb the grid? >> our derivative applications, the generators, we're the first solutions in ukraine to have mobile solutions that can go right to the point of use where the power and electricity is

needed. we started their derivative. there's a lot more we can do in ukraine and other conflict areas. >> larry, i can remember our first interview some time back. it was a bit of a different story at that point. it's been a long road. i'm curious as to your expectations in terms of how long you want to continue to help ge aerospace, for example, especially given the enormous amount of work you've had to do over these last five-plus years. >> david, i'm so proud to have not only been on this team, but to see what the team was able to do over those five years. again, as i mentioned a moment ago, i think at aerospace we have a lot still to do as we serve our airline and air framer customers around the world. we know there's a lot happening on the military side of the business. so we had a great celebration here at the exchange last night. we just rang the bell. we're headed back to ohio later today. that's where i'll be this afternoon in my office and really looking forward to being

full time at ge aerospace. >> there's another aerospace company having its share of issues. it occurs to me they might be looking for somebody to turn things around. would you ever have any interest in being the ceo of boeing? >> our relationship with boeing is an incredibly important one, has been for decades. we are in many instances the sole provider of engines under wing on their single and wide body platforms. i think all of us at ge aerospace will do all we can to support boeing in a difficult hour. we're optimistic about that going forward. >> i'm curious as to why you're optimistic and what you think particularly from your vantage point, someone who is an expert on execution within the industrial complex, so to speak. >> well, i think dave and the entire leadership team has articulated what they need to do with safety and quality at the top of the agenda. that's not something anyone does overnight. we certainly didn't at ge.

i think they're oven that path. where we can help today, where we can help as we think about future platforms, we're investing today, david, on the technologies that will not come to market until 2035, 2040. so to scott's earlier comment, we're going to play the short game with our customers. boeing at the moment an important one, while we continue to invest long term. the decades' long leadership positions that we enjoy at aerospace are perpetuated -- >> are you referring to different types of propulsion? are there moonshot technologies we need to start thinking about seriously? >> we'd want you to think a lot about what we call rise, a program for revolution innovation in sustainable engines. think about an open-fan architecture that will propel the next generation narrow body driving 20% or more improvement in efficiency or in emissions

reduction. those are the technologies i'm alluding to. the building blocks that are under way today, which we won't see at your local airport for a while. that's the way we invest and innovate. always have at ge aerospace, always will. >> scott, we have a one end and then decarbon nation on the other. how do we solve and create a pragmatic world of energy going forward? >> it's a combination of a lot of things and during this decade of action we have to use the technology that exists while inventing things for tomorrow and that's what vernova is focused on, whether that be carbon capture, combusting hydrogen and das turbins. it's a little bit of all of the above, right. >> do you think that -- right now -- a political imperative about climate change and under a new and different president, are you concerned you do not have a climate change believer and maybe some of the let's say

incentives may disappear? are you thinking about that? >> we spend a lot of times on both sides of the aisle. with the energy transition as it relates to the electric power system it's clear investing in the electric power system is investing in jobs, in u.s. competitiveness, manufacturing. it's becoming more and more a conversation on u.s. and national security attached to energy security and those are themes that are supported on both sides of the aisle. >> so you think if trump wins an the ira goes away your business is still in the same position? >> we have conversations with both the republicans and the democrats on these priorities with both u.s. competitiveness, jobs, innovation, and that's really what we're investing into for over 130 years, ge has served many administrations. we'll continue to be able to serve and partner with many going forward. >> you were able to come up with investment grade, two years ago, no. some of the imperatives that have come including energy security have helped you, i have to get go you, data center growth because i'm getting a 5%

number after being out west a year, can't handle that as it's currently configured. >> that's why it's going to take them -- the last 20 years there hasn't been a lot of investment in new power generation or low growth in the u.s. and the reality is we're going into a cycle where that's going to come. with it we're going to have to invest in a lot of technologies. there's new gas editions added in the u.s. there's a lot more wind and solar. it's only going to work if we invest in the grid simultaneously which is why we talk about the super cycle that's coming with the energy transition we're excited to serve. >> thank larry and scott and congratulate you both. it's quite a day here. it's the reinvention of a company that a lot of people unfortunately had left for dead, but you didn't do that. what a workhorse. thank you, guys. really appreciate it. >> thank you. >> thank you. as you can see, a pretty tough tape at the open. dow down 500. only utilities and energy are green. watch bonds as well.

10-year just south of 4.4. we'll get fed speak beginning in eight minutes. bowman is on the tape, williams, mester and daily. we're back in a moment.

what's on "mad" tonight? >> tloilg have ge and vernova. i have paychecks, part of the big selloff. i don't think the selloff is over but remind people as you said, it's been such a bountiful time. >> nice as we move into april. great show. we'll see you tonight. >> thank you, guys. >> "mad money," 6:00 p.m. eastern time. as you can see 1% declines on the dow and the nasdaq and the s&p. we'll keep an eye on the selloff

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♪ good tuesday morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla and de live for you as always from post nine of the new york stock exchange. take a look at stocks, an ugly start to the day with the s&p down a full percentage point now. the nasdaq is down 1.4%. tech is getting beaten up harder. dow down 461 points at the moment. it's been a rough start to the week. the only two sectors that are higher right now are energy and utilities. what's weighing the most, well health care is at the bottom of the pack today, down 1.7%. consumer discretionary and information technology, they are all weaker. the culprit, take a look at the bond market. treasuries really has been the story and the selloff in bonds, pushing yields higher.

the 10-year note yield hit 4.4%. the 2-year yield 4.7%. we're going to talk about why that's happening. stronger data has been a big part of the story there. let's show you commodities like gold and energy which are also on the move and higher which can be inflationary. wti crude pushing up against $85 a barrel and brent at $88 a barrel, gold higher again today up 1.25%. 30 minutes into the trading session, here are other big movers we are watching. investors hitting the brakes on tesla. shares falling after first quarter delivery numbers fell short of estimates. much more on what to do with that stock now coming up. shares of the big health ventures are dropping after the centers for medicare and medicaid services announced how much rates would rise for services like medicare advantage and prescription drug coverage and planned a 3.7% hike in 2025. the same as what was proposed back in january. investors were expecting a larger hike and that's why health care is at the bottom of the market. and then check out shares of

trump media djt the most surged ticker on cnbc. shares falling after tumbling more than 20% yesterday, down about 3%. calmer action here. the company disclosing in regulatory filings it generated a net loss of $58 million last year and revenues of only $4 million. shares hit a high of $79 back in the public debut last week post spac mergeer. they're around 47. >> let's get jolts and factory orders with rick santelli. >> hi, carl. indeed, we see the 10-year note yield are at the high yields of the year as we see a slightly better look on job openings and labor turnover. better than expectations. but when you look in the rearview mirror it's not better. as a matter of fact, last month's revised 8, 748,000. this month 8, 756,000.

we're starting to invest right around and slightly under 9 million. these numbers are a significant cry from some of the high watermarks of last year. we started last year at 10, 425,000 jobs for context. fac factory orders, fresh february, up 1.4%. pretty powerful. that's the best month over month positive change since november when up 2.6. strip out transportation, remains a lofty up 1.1%. and that is the best level since august of last year. now, switch gears here to durable goods. these are final numbers replacing mid-month reads. our mid month read up 1.4 and becomes up 1.3. that follows minus 6.9%, minus 6.9%. that was the worst going back to april of 2020, so a little bit

of reversal there as we play a bit of catch-up and remember the minus 0.8 in the review mirror on factory orders and then durable goods and see we really popped here. ex transportation up 0.3 replaces 0.5%. nondefense ex-aircraft, remains 0.7%. shipments originally released at minus 0.4, now minus 0.6%. on the shipments down 0.6% is the weakest number since february of 2021. that doesn't give me a lot of hope looking through the windshield. interest rates at 4.38 would be up 7 on the day. remember, high watermark for all of '24 is 4.32% outside of today. back to you. >> we're surpassing november on the 10-year yield. thank you very much. rick santelli.

and just to reiterate on the softening of the labor market trends we got in jolts, he mentioned fewer job openings. i look at the quits rate. it's come down from high levels we saw in 2021. quits, good sign of people's confidence in the labor market and their jobs they're quitting and feel confident they can get a new job and wages. we've come far back down from those high levels. here's the quit rate that stands today for the last number in february at 2.2. it's been there for basically four months. as you can see it's come down over the last year or two, which shows continued softness in what's a pretty strong labor market already. the story of the day is the bond market as rick mentioned. high levels of the year for the 10-year note yield. the question is why? we are getting some adjustments in terms of the outlook for the fed. that's been the story all year long. remember first, the market was feeling more dovish than the fed. they started out the year

thinking the fed was going to cut six times. now, market is feeling a little more hawkish than the fed. the last fed projection they would cut three times on median and now we're trimming back estimates that maybe they'll cut two or three times. bespoke put out a good chart about the june odds which have shifted. that's the next meeting where it's now a coin flip, 50%. after strong ism numbers on manufacturing, it actually went below, david, 50% odds of a june cut. we're just about there now. and you can see, we were near 100% odds of a june cut when we first started out the year. things have really changed on this front. >> they have changed. always a tell for me in the market is the companies that have a lot of leverage, a lot of debt. i mentioned this earlier if you have a debt stack that requires a certain amount of refinance, call it later this year or next year, the chances you're going to see substantially lower rates

are starting to recede and more concern about your ability to meet those interest payments and/or how much they're going to eat up of your earnings. >> the interesting thing is that equity market has not minded really, until now. we saw rates move up throughout this year of 2024 as the economy has been stronger and the rate cut odds have come down. it feels like now, there's been a new wake-up call where equity markets are starting to react to that. it's happened on the back of good data. we got the ism yesterday. the best way to show what's happening with expectations the atlanta fed gdp now chart which tracks where we might be in terms of gdp growth in the first quarter, it witent up again and we're tracking for 2.8% growth. carl and i like to look for every update because they come out after these data releases, 2.8% growth is just not where the market expected to be, even if the market came into 2024, carl, not expecting recession.

>> running characteristically hot, compared to say goldman at 2.1 or something like that. >> way above. >> yeah. >> so you can see the blue chip consensus was the bottom chart. atlanta fed gdp tracker has been consistently above that number, but we watch it because it's a good real-time indicator of momentum for the economy and the momentum is good. is that good for corporate earnings? that's been the story, right? earnings outlook improves, the stock market is okay. today we worry about high yields and maybe interest rates. >> the fact that now suddenly everybody seems to be cluing in on higher for longer. >> james gorman, former morgan stanley ceo said i wouldn't be surprised to see no cuts this year and increasingly you're hearing more of that. very patient mode. feels like they want to cut but the better data equals more patience because they want to make sure inflation is taken care of. >> still have a jobs number to

work through at the end of the week. second quarter getting off to a rocky start. stocks down sharply today, although marginally off the opening lows. joining us victoria green, founding wealth partner and cnbc contributor. great to see you. the thinking among some has been this rally is not beholden to rate cuts, but now some are arguing we're going to find out. >> i think the job market on friday will be a huge number and market moving. today's jolts was in line. the quit rate shows people are less confident they can find a new job. the labor market softness could weigh out sticky inflation and we could still see that three cuts. this is one of the first times that market is pricing in less cuts than the fed. we came into this year with 150 basis points of cuts and now about 65 onaverage versus 75 on the dot plot and we have to see what the fed does. i am worried about commodities. we're a little overweight in the energy sector, and industrials, some of the cyclicals because

right now commodity creeping up could make inflation even stickier, but there is hope. carl alluded to it friday. that's why markets liked it. if we see in labor market softness, it could outweigh some of the stickiness in the pce side which to be frank is driven by housing currently. the goods have been deflationary. some of the more rate sensitive. it's interesting to see utilities up today because they're a little more rate sensitive, flight to quality there. it's time to shine like we saw in march. >> yeah. coming off you one of the best months for growth over value in a long time. some of your picks are in industries and industrials. this doesn't feel like a playbook counting on three cuts this year. >> it's not. the data is sticky. if commodities keep running it's going to put pressure on inflation. the only thing that saves it is

bad news on friday meaning good news and wanting to avoid pushing the economy into a landing of some sort. we're on the whole no landing situation. some of the old-school tech, ibm, cisco, they play great dividends and they have strong cap flows and very good revenue growth and they haven't necessarily seen the market love. even dell has come out of the woodwork as a great performer. as you're looking across the marketplace value doesn't mean energy, industrials and financials. those are great core positions to have. you can find value in the old-school tech that has reinvented themselves. don't forget ibm was the o.g., original gangster of ai, with watson and know what they're doing in the hybrid cloud space. >> are you adding to exposure or trimming or holding? it feels like we are at an interesting crossroads with rates starting to move. >> sure.

absolutely. i actually still like equities over bonds. i feel like the upside there, the revenue growth, there are fundamentals beyond just the fed driving stocks and potentially driving this market higher. i see us in the early to mid innings of the bull market and i will mention it has been a long time since we've had a pullback. i was looking through statistics. i don't think we've had a 2% down day in 270 trading days. we're on track right now, possibly today, to have the first time in a long time our pullback in 2024 has been 2% in total and we have so many people ready to buy this dip, so much cash on the sidelines. i see equities as a good place to be adding in. >> appreciate that very much. thank for the help on it with the tape like this. >> thanks, guys. >> as we head to break, our road map for the rest of the hour. tesla's latest delivery numbers falling well short of expectations and shares are taking a hit. we'll speak to a long-time tesla bull why he thinks this could be

a turning point. >> we are getting closer to the crucial proxy vote at disney. the very latest on where we stand this hour. >> a lot of big movers in today's market drop including the health care related names. why the insurer is under pressure when "squawk on the street" is back after is th. (christina) with verizon business unlimited, i get 5g, truly unlimited data, and unlimited hotspot data. so, no matter what, i'm running this kitchen. (vo) make the switch. it's your business. it's your verizon.

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numbers that were well short of estimates. the shares, of course, had been down as much as 6%. losses added to the stock's big drop in the first quarter, of course, when you know the shares were down as much as 35%. our next guest says well, it wasn't a good quarter. i want to get to dan ives and everything he's got to say. long-time bull on the stock from wedbush securities managed director of equity research. i'm reading your report which you wrote very quickly. let's call it as it is. while we were anticipating a bad quarter this was an unmitigated disaster. first quarter deliveries was a nightmare quarter for tesla, you wrote. elon is pressured by the street and china demand remains soft and you also say in this case criticism is warranted. but then i end you still have an outperform rating and i wonder why. >> for the long term, in terms of the actual opportunity for ev, for full self-driving, for autonomous, that's still there. let's just call it no smoke and

mirror. if you looked up trainwreck in the dictionary you would see a picture of tesla's 1 q quarter. i think the big problem is deliveries. how do you reverse the trend? that's why i believe this is a fork in the road. in other words, musk either turns this around whether it's cutting prices, put the strategy in place, or david, i think we sit here and maybe three, four quarters from now, this is actually a seminole moment and what could be darker days ahead if they do not turn this around. >> what does the turnaround look like? they're cutting prices. facing more competition from chinese ev makers not just in the domestic chinese market. what do you do if you're tesla? >> i think you have to lay out the strategy. what are price cuts going to look like? when are the new models coming? what could software be as a percent of revenue. what's the ai road map. it's playing darts blindfolded. you don't have an adult in the room. the conference call we talked

about here have been -- so investors, they're hoping in terms of that -- what's on the other side is, now in terms of the growth, the opportunity, $30 billion in cash, they're in a phenomenal position from that perspective. this is what i said in the last five years, probably the darkest period relative to what we're seeing in china and this quarter, exclamation mark. >> you talk about, you know, the hope of investors. you still clearly have hope as well. what do you base your hope on? you've been -- i mean the last two minutes here you've been negative. >> it's that we're 3 or 4% of automobiles or evs is that full self-driving autonomous, you could argue that could be a trillion dollars worth of value from the software perspective. the china story, you've seen the price cuts start to stabilize. they had a good read over the

last quarter. there is some optimism. you could be towards 2 trillion units for the year but this quarter, there's no way to glass half full it. this is one where even numbers call it 415k, 386, a disaster. >> is the -- is it supply or demand? we expected some production setbacks in the first quarter. >> i think supply would be dog ate the homework. call it 30k. you could explain it in a press release. it's demand. and then the problem here, sara, okay, you're either going to cut prices or like you'regoing to hold serve and then focus on what you can do margins and where volumes could go. you can't just put one toe in the water. in other words, what's the strategy, how -- >> do you know how much is china? can you tell? >> we believe china is down call it 3%, 4% year over year. china was supposed to be up 2%.

other automobiles coming out we talk about it, probably as negative as i've seen in china in years, when we were in the region, but the tesla growth story is still there. we're still in the early innings where this can go, but just like we've seen, whether it was, you know, whether it was cook, whether we've seen nadella, you have to navigate and walk investors through the white knuckle moments, otherwise, i can tell you from phone calls i'm getting after this, investigators what's the hope and what can we hang our hat on. >> it's not clear musk is guys to do that for you. >> ever since the cfo left, you need to give guidance and give the strategy and then investors they could agree or disagree, but right now, that blindfolded is not the way to go about it. >> you still think they could hit 2 million. >> 100%. >> lay out the strategy. they didn't give guidance on the

call. give a range. give some targets. you can't just have flying blind. that's the issue with a quarter like this, this is a fork in the moment. this is for musk, navigate it, this is a rallying cry and it was a buying opportunity on the other side, but if you don't navigate investors through it, with a quarter like this, it's going to be tough. >> we're going to continue the conversation, but certainly appreciate you stopping by today. thank you, dan ives. >> tesla is part of the story but we have a selloff. the dow down about 433 points. 182 points of that loss is united health care. these health insurers are getting slammed today. it's not just them, humana, cvs health, after the medicare advantage rate announcement came in less than expected. if you look at the bottom of the dow, besides that it's salesforce, home depot, tech is selling off. we have nvidia weighing on the

qqqs as well as microsoft and tesla. still to come, disney reportedly pulling ahead in its proxy battle against nelson peltz with more than half of shares voted. 'lbrg you the very latest next when "squawk on the street" comes right back. n 5!] copy that. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.] -changing route. -go. roadblock ahead. ...back up, back up... reverse! reverse! next level moments, we're 30 seconds out. need the next level network. [north corridor, hurry!] -coming through! -or 3, let's go. the network more businesses choose. transplant received. at&t business.

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. welcome back to "squawk on the street." keeping a close eye on the market selloff. s&p down about 1% as the yields continue to climb a bit. consumer discretionary among the biggest drags. dom chu is tracking the action. >> good morning, carl. theconversation you had with dan ives regarding tesla, tesla is the biggest driver for the downside in consumer discretionary, but outside of that trade, a couple of big story lines are developing here as well. now i'm going to show you pvh corp the parent company of big clothing brands like calvin klein, tommy hilfiger. pvh is not a member of the s&p 500 but the 21% decline you're seeing there is having reverberations. pvh by the way with some forecasts for annual profits and revenues that came in disappointingly and shares are down 28%. let me show you the effects on the s&p 500's consumer discretionary sector. big brand warehouses like vh

corporation, parent company of north face is down 6% in sympathy with that. tapestry, ralph lauren, decker's outdoor, some of the clothing and apparel makers in brands out there that are down in sympathy with pvh. keep an eye on that. and then carl mentioned the interest rate rise the 10-year yield you have to go back to november of last year to see yields. that means mortgage rates will follow higher as well having a reverberation through mostly with regard to the home builders. check out pulte group down 5%, dr horton down 5%. outside of tesla, david, it is about interest rates for some of those home builders and pvh weighing down the apparel sector. back over to you, david. >> i'm glad you did that as well. the broader impact of pvh was interesting on the other names and sara, we have other parts of

the market as well that are wooeshg. many of the health insurers pressuring the broader indices and dow. keeping an eye on shareholders of disney as the bruising proxy fight between disney, and its shareholder trian comes to a conclusion. this time tomorrow, we should have a pretty good idea of who the victor will be. it's 1:00 p.m. when the annual meeting is scheduled for local time eastern. 10:00 on the west coast. reports have been coming in of various large shareholders and where they have put their votes so far. you can withdraw your vote right up until the end and change it. that said, we've got the likes of blackrock has reported by "the wall street journal" an important large shareholder voting in favor of the current board, including bob iger and everybody else on the board. and norway's giant fund also in

favor of the current board members. you can see who is backing whom there and some of the other names as well. you got on the trian side a bunch of ceos also former ceos that have worked with the company that are -- have been favorable in terms of their comments. sara, again, i do like to point out we'll see, you never know until the end as i said, i think many times over the last couple weeks, there's significant confidence in the disney camp they are going to prevail here. >> is there any scope for a compromise? sometimes you get deals -- >> you do especially if it's really close. i do not see or hear any signs of that in this case. i think this is going to go the distance. the expectation would be right now that disney will be victorious. that's a bit early to say. retail is not unimportant here. >> 130%. >> i think there is confidence in the disney camp they will get

a large percentage of that vote. to be clear, especially the large institutions, we've seen jockeying at the end and you can change your votes. we've yet to hear from state street or vanguard or any reporting on their position. >> i'm having flashbacks to the png proxy fight was similar in that there was a large concentration of retail voters, extremely close, got a little ugly, maybe not as ugly as this one, but definitely was contentious and what happened was both sides claimed victory on that day because it was so close. >> it went on for weeks. >> they were in a conference room counting votes and shares. >> he ultimately joined the board. >> he did. >> and shareholders would think that was a very good thing. wondering if anything similar could happen if it was close this time, but even if not, if disney prevail, they are going to have to get succession right this time. >> no doubt. i mean you heard carolyn everson

talking about it. and we spoke to james gorman on the committee. they have to get it right. meantime, tape remains challenged. still sub-5200. utilities and energy the only two sectors that are green. 10-year come off a little bit, 4.36 but the long bond above 4.5. still to come, tech is the worst sector in the market. there is a reset coming for that group? we'll discuss that after our break. xwch l - so this is pickleball? - pickle! ah, these guys are intense. with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right?

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following the deaths of seven workers in an israeli air strike. the u.s. based nonprofit founded by chef jose andres said it teams was traveling in two cars and coordinated its movements with the israeli military. benjamin netanyahu said the strike was unintentionally hit innocent people. a 12-year-old suspect is in custody in finland after a deadly school shooting. police say one child was killed and two others were hurt. according to police, the suspect ran from the school after the shooting, but was detained holding a firearm a short time later. it's the end of an era in las vegas today. the tropicana hotel will close to make room for the as a new baseball stadium. demolition on the iconic 6-year-old property is set for october and the last guest checked out today at noon. sara? >> okay. thank you. that is an end of an era for the tropicana fans.

tech the biggest drag right now in the selloff, names like amd and semis leading the declines. the declines magnificent seven names looking orderly. joining us to discuss is brent bill, jefferies research analyst and d.a. davidson software analyst. it's good to have you. what's the sentiment like from your clients and investors you talk to on mega cap tech after the run up we saw in the beginning of the year and the move up in yields? >> semis is incredibly positive, as a software analyst no one wants to talk about our group. dell up 50% year to date, and nvidia and the hardware names, that's been the place to be, and software has been an afterthought. as we travel globally right now, the sentiment is off sides and you can see that in the semi index versus the software index.

still, we think most clients are waiting until summer to buy our software group and waiting for a turnover in semis and hardware. we haven't seen that in a big way. we think effectively that's what will trigger this rotation back into software and internet and the semis at some point. >> you're hearing the same thing? is it an either or with semis and software? >> i think that's exactly what has happened. we've had this -- a lot of excitement around the hardware names, especially the semi names, because that's where generative ai of evolution started, but we are this year and next year going to rotate back into software and it's going to start with the biggest names. amazon and microsoft with aws and azure are going to be the facilitators of ai. by the end of the year they will enough v enough gpu chips and start making their own and

deliver a significant amount of services so their software customers. given the expectations from software companies have come down so much after earnings, we believe they're set up well for the rest of the year. >> amazon and microsoft are your top two for that kind of rotation. brent, what about you? who do you think are the biggest beneficiaries and first movers here in ai and the software space? >> microsoft's leading by 50 lapse. no one is close to them. so microsoft number one and then salesforce.com number two. it's really a margin story today. they're not in the same position in ai as microsoft. there's an incredible amount of data sitting in salesforce.com service systems they can leverage and we think that will effectively come later this year. >> if microsoft is ahead by 50 laps, how does the valuation look to you right now? >> it's really reasonable.

it's 30 times. >> i'm looking where it's trading. 30 times next year's earnings and has outperformed but what do you think is not appreciated here? >> i think from my perspective, when you look at the pricing power, microsoft's strategy is to put copilots across all their stories. they can sustain double-digit growth, continued margin improvement, great cash flow. when you look at the product lineup, it's not even close in terms of who has the right product for the next three to five years in ai. microsoft is so far ahead and this is recurring revenue. in many ways you're buying this one time installment of hardware in semis to get foundation built. companies will see that recurring revenue. microsoft, given the position they're in will see an incredible recurring revenue

across all their lines if copilot gets adopted that spark a 20, 30, 40% lift in pricing. they probably only see 100 at list but they'll get discounts from large enterprises. that commitment and that recurring revenue is there and so we see a story north of $16 of earnings a year out. when you get $16 of earnings you can actually go up the same multiple it's trending right now and get a higher stock. >> gill, i wonder if there's a view from investors that as ai spending ramps up from capex and the focus changes priorities if that comes at the expense of cloud and whether that's held the group back. >> well, what's happened is people came into this year expecting both things to happen, enterprise spend to recover and ai dollars to start being spent on software companies and neither thing happened this year. that's why there was some

disappointment in the software companies. the reality is ai is going to take a long time to play out for most software companies and enterprise spend isn't going to pick up. it's really a matter of picking the specific stocks that have somewhat of an attractive valuation, especially relative to their history in the mid cap land that companies like smart sheet, diana trace. but i want to build on what brent is saying. microsoft is towards the high end of its multiple range historically, but this is a different microsoft. this company is better than the last 10 or 15 years. it should trade at a higher multiple, but i also want to jump back into amazon. i agree with brent, microsoft has ran laps around aws but aws is a place to catch up, it's bigger than azure and has the technology and can deliver the same services to its customers. it's not getting any credit. it's trading towards the middle

of its historical multiple range. so as it catches up and delivers more of these tools, we think it will outperform. >> what gives you the confidence they're going to be able to deliver those tools to their customers and execute in the way you believe? >> so just like microsoft made the big investment in openai, amazon made an investment in anthropic. interestingly it took that product and said we're going to build an end to amazon and use amazon chips and put it on aws and we're going to provide the same tools. if you look at the technologies, they're fairly xcomparable at this point. everybody started on openai they're now diversifying away and using new tools and anthropic, even though it's a distant second, is capable of delivering these same tools as microsoft has been able to with openai. >> brent and gill, thank you both for joining us with some picks in thedown market.

appreciate it. still to come health insurer stocks hitting freshlows today. what medicare has to do with the story after the break. an interview you do not want to miss the ceo of barrick gold as spot prices hover around all-time highs. he will join money dippers at 11:00. dow has recovered down almost 400 points. dude, what're you doing? i'm protecting my car. that's too much work. weathertech is so much easier...

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shares of health insurers tumbling across the board. it's not all about the red tape today. to bertha coombs with more on what's driving that action. >> carl, usually the center for medicare and medicaid revises its advance notice for what kind of rates they will pay. they usually revise them to a higher level. not this time. for 2025, cms says it's maintaining its outlook of a 3.7% payment increase on average for medicare advantage plans.

analysts say that rate effectively amounts to a 16 basis points cut for next year when you add in other factors. last month humana calculated the impact for its plans would be effectively a 1.6% cut. humana is struggling with high medical costs and analysts saying that humana is struggling as well with tough competition and premiums and higher costs this year and will likely need to cut its 2025 outlook. united health also a major m.a. player taking a hit. a big drag on the dow, but united health also has an advantage over its peers with 90,000 doctors. on the other side it can easily control medical care costs. cvs health aetna has more of its own doctors after acquiring oak street health. cigna is the least impacted because it is in the process of selling its small advantage business.

this comes at a time when costs are elevated among seniors, hospitals and doctors raising their rates and the medicare advantage market incredibly competitive. insurers risk losing market share if they actually raise premiums too high to maintain margins. it's tricky as they start looking out here to their 2025 plans. >> right now, bertha, looks like margins are going to come under pressure given as you just said they don't seem to have as much flexibility in raising rates. >> exactly. then on top of that you add the iras, so on the drug side, the part d side, there is an out of pocket cap of $2,000 that goes into effect next year. great for seniors but that means the payers will have to pick up the rest of that in terms of what they pay for those drugs. and as you start now being able to use wegovy, for example, for heart conditions, that's an expensive drug which medicare is already paying about $4.6 billion on as of 2022.

so the numbers are going to get a little tougher for 2025. >> could we see an impact for consumers where these insurers decide to cut back on benefits for medicare customers? >> if not the benefits themselves, you could see more hurdles in terms of getting preauthorizations. if you need that procedure the doctor may have to go through more hoops to get there. we're seeing tension between hospitals and providerer groups and the insurers over rates with some hospitals saying they might not deal with medicare advantage plans unless they come up on the rates they pay. it's a tense time now as everyone is preparing for 2025. unh the worst dow name. not just tech taking a hit in today's market drop. the other sectors and stocks you need to watch, energy is a

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second quarter off to a bit of a rough start for stocks. you can see we're down for what would be the second consecutive

day. of course, we have a lot of time left. bob pisani is here. we were talking about orderly declines versus disorderly declines. what makes the difference? what does it actually mean if you -- >> in the old days it was fast with a lot of volume. art cashin used to tell me he would hear the teletype machines increasing, the sounds on the floor physically used to increase. we don't have them down here anymore, folks. what are you going to do? this is about rates going up, sticky inflation, the fact that the economy is still strong. the economy is strong is not a bad thing. you can see the effect when you have higher rates on rate-sensitive sectors it like technology stocks, semiconductor stocks. a lot of big names are down 2, 3, 4%. semiconductors in general getting hit the most. they're the most interest-rate sensitive. you've heard bertha talk about health care. no need to belabor that. united health, major component of the dow industrials. that is a component of the

decline independent of the the rate concerns and sticky inflation issues. when you get higher rates, you have home builders, used to be the real estate reporter a million years ago. not surprisingly you get 3%, 4% declines at lennar, horton. interest rates around the ceiling companies, plumbing companies a little weaker. the bright spot is energy. it's continued to outperform. every day i put up new highs in some energy companies and these are all new highs. 52-week highs at least. right across the board. the refiners like phillips and voe valero have been strong. occidental and pioneer have been strong, halliburton, the service companies have been strong as well. oil over $85 at this point. that's the highest level since october. new highs on all of them. just want to comment on some of the meme stocks that have been moving, particularly yesterday,

we had trump media filing its 10k report. the company's revenue is $4.1 million for 2023. net loss of 5$58.2 million. the company says it plans to have operating costs into the foreseeable future. given the loss and low revenues, there's a fairly wide gap between the 10k and stock's valuation. trump media went public on march 26th, as high as $79. it's rallying a bit today here. in january of this year, the s.e.c. considerably tightened disclosures around spacs. this is why you have some disclosures. prior to these rules, executives marketing the company to be acquired, often made wild claims about the future profitability of their companies, claims which never would have been possible to be made had a traditional ipo route been used. the new spac rules adopted in

january made the s.e.c. require the target company and made them legally liable for any statement made about future results by assuming responsibility for disclosures. elsewhere, other meme style stocks have had a tougher time of it recently. gamestop has been on a long, slow descent, the mother of all meme stocks. yesterday it broke below the lowest level in three years on an intraday basis. rallying a little bit today. reddit went public, $34 march 31st, went to $74 a few days later. traded today at -- you see here, $11 -- $44. a new low but still above its initial price. reddit, you can see that. elsewhere, gary gensler is speaking today at a conference. he is emphasizing the value of disclosures. there's a major s.e.c. conference today. they're laying out their priorities. one of the things he led with in his speech today, i monitored that, was the importance of disclosures going on. as a result of the spak rule changes in january, this is

where you get these kinds of comments from the company requiring them to essentially disclose ongoing concerns -- >> they're a public company and they would have an obligation. i spent a long time in 2021 looking at ridiculous projections that would come out of some of these companies that were going to merge in terms of a spac merger and how absurd they were based on multiples that seemed impossible and, frankly, ebitda that seemed impossible. >> you look at some of these price to sales, for example, normal valuation metrics, the s&p is probably 2.5 times price to sales. apple may be 6 times. trump is maybe 1500. >> djt -- let's not forget, it's over 200 million shares fully diluted when you have the converts and warrants. he's going to get another 40 million shares -- or tnt will get another 40 million shares. it's only 14 more trading days

above 1750, which seems highly likely he has to average and that's another 40 million shares to his stake. >> fairly small float. >> you can't really short it. it's so expensive to do so. thank you, bob. on a market that is down sharply. we have the nasdaq down some 1.5% right now. we have gone through many reasons why. our live market coverage focused on this broader market decline will continue after this. this is our future, ma. godaddy airo. creates a logo, website, even social posts... in minutes! -how? -a.i. (impressed) ay i like it! who wants to come see the future?! get your business online in minutes

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good tuesday morning. welcome to "money movers." i'm sara eisen live on the floor of the new york stock exchange. ceo of barrick gold is with us. former undersecretary of state and goldman vice chairman bob hormats joins us. later on, eric jackson on why tesla is a buy right now at 164 despite today's steep drop