tv Squawk on the Street CNBC April 3, 2024 9:00am-11:00am EDT
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the fed lowers rates, the long end may not follow. it may drift up. if it's creating more ease in a strong economy. so, stick with value, stick with margin of safety, diversify the portfolio, and still stay cautious on long duration equities and fixed income. >> cliff, i wish we had more time. we will have you back again. sorry for the technical difficulties, but we appreciate seeing you today. that does it for us today. join us tomorrow. right now, it's time for "squawk on the street." good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. futures are red. adp comes in the second hot number of the week. powell speaks at noon. bostic on "squawk" just now reiterating one cut this year. the dow and the s&p coming off the worst day in about a month. you're going to hear what
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steve cohen had to say about markets and a.i., especially. plus, it is a pivotal day for disney. the company's battle with nelson peltz is set to conclude at its annual meeting. that is set for this afternoon when we will get the vote totals. and tomorrow, 9:00 a.m., right here, don't miss an exclusive with bob iger. >> is it right here or out there? >> it's out there. it's out there. i will be going out there, hoping that the high winds that are blanketing the area won't prevent my travel to see mr. iger. and by the way, just to make a point here, this is not saying anything one way or the other about the vote. he's going to do the interview either way. >> huh. okay. >> okay? is that okay with you? >> well, i'd be more inclined to do the interview if i won. >> i think that's his expectation and/or disney's as i've been saying all along, at least. they have had a lot of confidence they will win.
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but you wanted to make it clear that it is not -- >> do you share that confidence? i do. >> the reporting i have been able to do i understand that they're going to most likely win. i was saying this yesterday on scott's show on "halftime," and it continues to be what i am hearing. that they are going to win. where will they end up percentage-wise? it's clearly above 50%. will it be high 50s? could they get as high as 60%? other news organizations have been reporting on some of the large shareholders, you know, i'm just giving you sort of the overview that i am getting in terms of their confidence. >> i'm giving you the overview. >> you're giving me the j overview? do you have an underview too? >> no, i don't. and i'm not going to trade the whole team away because they're old and just get new players that i don't care about. i'm not doing that either. >> i wanted to hear about alonso, man. come on, andrew. >> and i want to hear about alonko. >> anyway, we'll get to that. >> it was a great interview with
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andrew and steve cohen on "squawk." bostic said, and as adp says at 184, economy keeps to chug along here. >> it's a good economy. yesterday was really classic. paychex was down 10 points because there was this line which says, look, we may not be able to do the number that people thought and it turned out it was because of some change in federal government program and business is quite good, and companies are still finding it hard to get the right people. now it's a little bit off. but there was absolutely no let-up. i was surprised the south wasn't that strong, but the nation was strong. the only real decline is because of the minimum wage law in california where a lot of companies have said, you know what? i'm going to get below the 50-restaurant threshold, or i'm going to lay off people. so, there's a place where i heard of unemployment.
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california. >> did you -- decent story today in "the journal" about the discrepancy in terms of measuring where we are in terms of overall employment because of immigration and the household versus the employment -- and the difference in the surveys because we may simply be undercounting the number of immigrants. >> i think that that's definitely happening. it's also moving up the price of rent. the cities are renting it have just overall demand? >> yeah. i don't know. it's not that i don't trust the numbers. i just think the economy is strong. there isn't any area of the economy that i'm seeing real weakness in. not one. not one. i keep looking. i don't have any areas. >> the calendar is loaded today. we'll get more fed speak. powell speaks at noon. we'll get ism services at the top of the hour. the interview with steve cohen talked about economic resilience, a lot of it related
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to -- almost to his golf trade and that is involving artificial intelligence. take a listen. >> bubble. i mean, i think the markets are discounting some of what we -- they think a.i. is going to do for companies >> you think it's discounting? >> discounting. >> you think that there's even more upside? >> i do. >> as a result of a.i.? >> my view is, this is a really durable theme. i'll give you one little anecdote. my cto comes to me and says i can save the firm $25 million by doing -- using these llms to improve our efficiency. now, we're a nice-size firm. we're not a huge firm. so, imagine what big companies can do. that's just one thing. it gives you a little bit of a look into what's possible. >> on top of that, jim, argues that the four-day workweek is coming. >> that was shocking. not sure where he gets that, but
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he's steve cohen, and i like him very much. always have. i know that michael had a piece out yesterday from jpmorgan talking about how he doesn't think that things have gotten out of control yet. that the stocks that are doing the best are the companies that provide a.i., that, therefore, you don't have anything -- he's not talking about a year 2000 bubble. no bubble. >> right. and having reported throughout that period, it doesn't feel like that now. >> no, no. companies aren't doing better because of a.i. >> to your point, you can make an argument all you want about multiples and whether they are overdone versus the potential growth rate of some of these companies, but we're not talking about a slew of companies that will never make any money having a business model funded regardless. that is -- it's the opposite. we're talking about the biggest companies with the deepest pockets, the most capital being -- coming in, going out. >> in the history of the country. >> nvidia's making a fortune, okay? the stock's going to describe
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and and drab down. this is why you had such a radical move up. it just kind of didn't do anything. people gave up on jensen huang. they're going to give up again, because they see the stock goes down. they take care cue from the stock, and they say, oh my god, that's a bubble. well, i think that the amount of money that nvidia's making is extraordinary. and you don't know how to value it other than to give it a higher multiple. next year, we'll look at it and it's 16 times this year's earnings. >> cohen's point is going to be one that we discuss a lot as well, which is, is the stock market already accounting for the productivity gains of so many companies that eventually will really incorporate the use of large language models in their daily operations? it's starting. we know that. but it's very much unclear whether it really has gained that much momentum that we can account for it fully. >> right. bill mcdermott from servicenow would say we're nowhere near. marc benioff has now products
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coming out that say we're nowhere near saturation. it's very early. there's -- it is -- you know, let's accept cohen's interview. someone found $25 million. i think that he sells himself short. he would be the first, because he's got great people. he didn't mention any individual stocks. that's smart on his part, i think. but they know how to do this stuff. salesforce, all those stocks are the same chart. if we put up servicenow. the only one that's not the same is adobe, and adobe, i'm worried about. >> why are you worried? >> because they've got a low-end competitor that's come in, basically made it so that their suite's very expensive. >> that's canva. >> they pronounce it with a philadelphia accent, i'm grateful. >> i think it's an australian founder. >> he's an australian philadelphian. >> do you think that's a real competitor? >> their most recent acquisition was good. the suite -- they just need one design school to capitulate and lose -- leave adobe, and you'll
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see that stock go up of sorry. true. >> you don't have to be sorry. we discussed disney very briefly at the top there, obviously, again, we will be -- i'll be sitting down with bob iger tomorrow from l.a., but it does appear likely they're going to prevail in the key shareholder vote that is going to be concluded today with the annual meeting of the company. that will begin at 1:00 eastern, and again, all these different reports about where vote totals are, do want to stress that you can change your vote to the very end. that has happened occasionally. but, i mean, we don't need to have the conversation again, jim. my reporting would indicate they're going to win. the only question is how sizable -- >> where do the index funds come down? >> blackrock, i believe, and vanguard are in the disney camp. >> that's very interesting.
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i know that they're smart guys. they took a look at things. it's not just an absent minded vote. >> when iss went for peltz, one director for peltz himself, not rasulo, that was seen as a real positive. but retail is important here, as i reported yesterday. >> 40%. >> i think disney is confident they would be able to get a significant percentage of the retail investor base to go their way. obviously, having lined up the likes of lucas, for example, or even loreen jobs. >> disney family. >> yeah, disney family. so many other people who might at least have some influence on a retail base. and then the institutions. it's not going to change what iger does, really, and i'm looking forward to the opportunity to discuss with him -- >> dollar amount? >> -- what's going to be happening. >> get a dollar amount? how much they spent? >> i guess i could ask. >> dollar amount on some of the things they may have done with some of these people. foundations, things like that.
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>> are you bitter? >> am i bitter? i happen to be someone bwho's been to disney world ten times. i'm not bitter. >> you were in the peltz camp, right? >> i voted my shares for peltz for my travel trust. that's the camp i'm in. >> i don't think any viewer would be surprised. >> no. >> not revelatory. thank you for putting me on the spot, though. i enjoy that. >> every so -- i wasn't able to interview steve cohen, so i'm taking it out on you. >> i'm keeping the fophillies a they were. >> what are you going to do with alonso, though? >> i'm glad embiid is back. >> and olonko? >> i think they traded that great fish business to merck. i'm taking them down on that. downgrading to the lehigh iron pigs. >> final point on disney is we have had bill ackman enter the fray, of course, because how can you do anything without bill ackman being part of it? and elon musk.
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>> elon may be close to nelson these days. >> elon came out and said he's in support of nelson, but we know he has this running feud with iger that goes back to when disney pulled advertising on x and when -- at andrew's conference in the fall, he had some choice words for bob iger as we all know. >> you wouldn't want to compare tesla's stock to disney stock since that interview. >> no. and the tesla -- the numbers. i mean,how's your free cash flow doing over there? >> on tesla? >> yeah. did you see free cash flow on the new numbers? >> not looking good. >> the fulcrum. >> yeah. tesla shares look like they're poised to decline a couple more percent, but were you surprised that it wasn't a more pronounced decline yesterday, based on those numbers? >> yes, although adam jonas thought it was not a pronounced decline. as a matter of fact, i've got to tell you that the numbers we thought they were going to make
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just a couple quarters ago -- >> couple weeks ago. >> yeah. the flipping never, but investors digesting the negative volume. >> your point, carl, good trade if you do your -- >> when was the trade? was it february? >> it was actually november. >> i've got people that made -- on the ground, cybertruck. >> what about it? >> as many as you want. >> i can have as many as i want? can i get a good price on it? >> you have to pay. you have to pay for it. i don't know. i'm actually hearing from -- i actually have dealer contacts that say there are some cybertrucks if you want them. they're not the kind of hot as we thought. jim farley predicted to me what happened. he did not think they would be as well received as the best-selling truck in the world, the f-150. >> right. we're going to get to more of the tesla reaction, which continues this morning. we'll talk about intel shares, why they're this morning's worst performer on the s&p and the nasdaq 100.
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she shoots from here? that's kinda my thing. tesla shares under pressure again today, a day after falling almost 5% on those weak q1 delivery numbers. a lot of wall street calls out this morning, including jpmorgan, cuts its target to $115. guggenheim goes to $122. even jonas says his own q2 estimate would imply 30% quarter on quarter. a bridge too far, as he says. >> yes. and the jpmorgan piece is incredibly damning. we were thinking -- they were using a bloomberg estimate -- that tesla would sell 661,000 vehicles. if phil lebeau were to come on and say if ford did x and it was off by 10,000, we would be shocked. this is one of the biggest misses i can recall.
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maybe ever. >> jpmorgan goes on to say shares still look highly expensive, in their words. if, in fact, the company can't turn around. >> i was listening to cathie wood this morning, and she thinks that, what, 80% of all vehicles will be ev in a very short period of time, and i thought that was fanciful. >> in a short time? what period of time? >> five years. >> five years? >> i thought it was fanciful. >> 80% of all sales? >> you couldn't replace the install base that quickly. >> all new car sales from what is currently, what, 7% right now? where are we? >> yeah. it's not going to happen. i mean, i don't know. look, maybe she's even more of a -- i never want to come on air and just say someone has no idea that they're talking about. i say they're very nice. >> she's also calling for a $2,000 stock price in that period. >> that makes her very nice. nicer than pat gelsinger. >> meantime, more stories today,
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just the pile-on continues about their share, tesla's share in china. now below 7 as the chinese are stepping on the gas. >> well, the chinese, we know that -- i remember when bill ford said it's the greatest -- it's the existential threat to us. david, you know that -- i know you know that phil lebeau's excellent piece in chile basically showed you the world. >> i thought that was eye-opening for many people, just because as phil has pointed out many times -- not just evs. they're competing on i.c.e. vehicles as well at price points that are far lower. so, yes, in these off markets. in the united states, you're not going to be able to buy a chinese ev. and by the way, our treasury secretary, on her way over there very soon to discuss that. perhaps that will be part of the discussion janet yellen has with her counterparts in china. >> and sara will be there as well. i don't know if she's going to be in the negotiations. it's possible. >> translating.
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>> sara may be leading negotiations. but the question, of course, as they continue to overproduce for domestic consumption in china. therefore, surplus of all sorts of goods. >> they're back to what they did in every industry. and their quality is good. >> at the same time, if you could offer people a decent quality ev in the united states that costs $12,000 -- >> i could not get disney to buy land in new mexico, but the chinese are buying land in mexico like you wouldn't believe. new president in mexico, by the way. a scientist. going to be interesting. >> there's going to be an election. >> she's up by 17 points. >> the mayor of mexico city, who is one of the candidates, yes. >> yes, but she's a scientist. it'll be interesting to see what she does. >> we're on the lookout for more auto sales numbers from ford today. we'll get that to you as soon as we can. in the meantime, cramer's "mad dash" and the opening bell after a short break. trading at schwab is now powered by ameritrade,
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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. let's get a "mad dash" here. they're applauding already for your "mad dash." >> how do you like that? they know. >> we got an opening bell a
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little more than six minutes from now. tyson foods. >> tyson foods has been one of the worst-performing stocks. like tesla, but tyson has been bad. they make chicken, ask wnd we a about to have, i think, a chicken price explosion. the input costs are going down, but the actual price of chickens, no. this is your worst nightmare if you're the fed. now, of course, costco slaughters like 2 million chickens a week. downgraded today, a fatuous downgrade. this is a stock that has been horrendous. >> it's only been down 2% for the year. >> can we see a five-year on tyson, please? how about a five-year? >> i'll give you a five-year. >> this is horrendous. it's traded down. but i'm now saying, it's about to go up. but i use it as a metaphor, david. >> three-year would have been even better. >> their input costs have gone down.
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that's what i'm worried about if i'm the fed. >> your point here is they're not lowering prices? >> to the final consumer. >> and you think they should be? >> i think they should, but they're not. they're not a nonprofit. >> no. >> right. but this is the profitable companies are trying to do this. by the way, i'm also calling -- i also say they're hershey. i think cocoa price is too high and about to plummet. hershey could be good despite glp-1. i'm a fount of good stories. on disney, i like the theme parks. >> that's great. i'm still trying to understand why if they're margins are going up, you're not happy with the company. >> i say, buy the stock. i just wish that -- i want people to pay less at the supermarket because i'm, in the end, a populist. >> yes, you're all about -- you're all about chicken prices. we got an opening bell about four and a half minutes from now. don't ferorget, of course, you n catch us any time anywhere by listening to and following the "squawk on the street: opening bell" podcast.
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morning, down in the premarket after the company disclosed financials for its semiconductor manufacturing business. it did reveal an operating loss of $7 billion in '23, jim, although they think this is probably the peak year of losses. >> i don't trust them. i think they had a chance -- david, by the way, the cfo, is a very serious guy. i'm not trying to say they bagged us. but we did have jon fortt there, an excellent interview, might have been a good time to sigh th -- say maybe costs are too high. everyone's been saying the costs are too high except for intel. there isn't anyone who thinks they can get anywhere near the cost. secretary raimondo is doing a terrific job trying to make it so they do, but i think the differences in cost between here and taiwan semi, what morris chang was saying when he started that company, was that you're not going to be able to beat them. you got to be --
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>> they are presenting segment results. different operating segments of intel. >> i can't hear you. >> let's get the opening bell here. at the big board, health care company solventum celebrating its spinoff from 3m. at the nasdaq, st. david's school in new york city celebrating financial literacy month. >> there we have -- i think that is st. david's. and i see my executive's son. right there. they're clapping today. there you go. we talked ge yesterday. do you have thoughts on
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solventum? >> they have some great story divisions, but there's going to be, i think, a little more like peralto. they came public, it was terrific, but people want to throw away a stock they don't know and keep the other. ge health care, you had to wait about eight weeks, so you have to be very careful with these, because even though they're good companies, the way this stuff is distributed is not -- it's suboptimal. >> meantime, ge vernova and ge tacking on another percent here. >> ge vernova is very strange. it was up most of the day and closed down two bucks in the last half hour. we have no information for why that did. i was very careful to say, be very -- this is, again, the problem with these, they're unseasoned stocks. a stock can drop four points in a few minutes. it's something you have to be careful about, even though i
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think the numbers are going to be excellent for ge vernova. >> we're getting numbers from ford. let's get to phil lebeau. >> hey, carl. for the first quarter, ford sales, up 6.8% here in the united states. let's go within the numbers to look at some of the key segments that people are focused on. we're going to start with ev sales rising 86%. you could sit there and say, it's cominf a lower number base from last year, 86% is not that impressive. you look at the sales within that, mustang mach-e, now the third best selling vehicle in this country. huge quarter in terms of when they knocked down the prices. that boosted sales there. ford is now number three among automakers in the u.s. and then there are the hybrid sales, up 42%. i know we have been hitting this repeatedly, not just with ford but with other automakers. the ev market, red-hot.
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point of reference, guys? first quarter, evs, while ford was up 42%, the market overall, up 45%. that's hybrids. ev sales in the first quarter for the market overall up just 3%. you don't have to look hard in terms of seeing what people are buying right now. it is hybrids. hybrids are in demand, and that's reflected in ford. q1 hybrids up 42%. the market overall, up 45%. >> what's the -- why? why hybrids? what is the appeal here? >> pricing. pricing and charging, david. if you had to boil it down. one, on average, the transaction price on a hybrid is about $5,000 less than the pure ev, and yes, i know you can get some evs lower than a hybrid out there, but that's overall for the market, and two, it's charging. i think there are electric. they don't want to do it right now when it comes to public
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charging that is inadequate, especially for a long road trip, and i think a lot of people look at the hybrids and say, look, i can get what i need out of this. i don't need to go fully electric right now. and the choices, you got toyota out there, which dominates this market. i mean, these are not -- you don't have to wrap your head around, saying, this is a new ev out there. you can go find a rav-4 hybrid. the rav-4 with internal combustion is one of the best-selling vehicles. that's why the hybrids overall are so hot right now. >> you know, phil, it's interesting. the pe of ford is still 6 and change. i don't think people realize that maybe with the aversion to ev, the stock has just come off maybe too much. are people worried about china? is that one of the problems, an existential problem that people think the u.s. will import chinese vehicles? >> i think people are eventually worried about what the chinese automakers are going to do to this market, yes.
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if you are an established auto maker in this country, you are looking at the chinese and saying, okay, what are we going to do? it's going to have to be trade production. otherwise, you will see the chinese set up as they currently are constituted, set up plants in mexico, come in through mexico, through nafta, unless there are trade barriers that are put in place. because otherwise, they'll come in far cheaper than what we see in the market right now, not just for u.s. automakers but all automakers in terms of what they're selling here in this country. >> meantime, phil, march, overall, average selling price was the biggest decline ever recorded in the month of manrch right? this is for industry. >> yes. yes. the industry is definitely normalizing in that regard, carl, and you're also seeing increasingly people are saying, before, because they were limited with the chip supply over the last couple of years, you really had to buy the top end. you really didn't have much of a choice. the automakers realizing that they have more supply are coming in with lower trim levels, and that has people saying, i don't
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want to spend $65,000. maybe i want to spend $51,000 or $41,000, whatever it might be. so, that's a big factor in there. incentives are ticking higher. >> phil, appreciate that. what a week it's been in auto sales. >> oh, geez. >> and aerospace on phil's beat. >> incredible. both of them. i saw david calhoun, by the way, leaving the board of caterpillar. >> not running for re-election. >> that's interesting, caterpillar being one of the great performers of this particular year. jim doing an amazing job. i bought back a ton of stock much lower. guys, i did want to hit endeavor. it's something i've been following for quite someperiod of time, and we did get a deal yesterday, i was able to report on it, but not on our show. the go private from silver lake is official. it's done. the deal has been announced. $27.50. a couple of interesting things here to share. no vote. no majority of the minority vote here. just not a vote.
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it's done. >> no vote? >> no vote. silver lake, obviously, controls the vote. >> acclimation. >> and then, the management team at endeavor is rolling in and there's no majority of the minority vote. they're like, no, not doing that. no vote. it's done. the vote is taken care of. that was in the release yesterday. also worth noting, michael dell's family office, one tof te big investors. dfo is what that goes by. silver lake and dell have a long history together, namely partnering to take dell private many years ago. and you may recall, of course, that carl icahn had a problem with the price they were paying, and that did need a vote. caused them a lot of headaches. this time, no vote. also, some were pointing to the fact that in the press release, it says they expect to close in the first quarter of next year, so almost a full year. why, right? why would it take a full year? what i'm hearing is that it
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won't. silver lake wanted to give itself as much time as possible, but there is more of an expectation this thing could close as soon as the fall of this year. it's not about a cfius review. it's not about the gaming business that is part of endeavor. it just was, hey, why not take as much time or get as much time as we can on the contract, but they do expect they will close it in '24, perhaps as soon as the fall. there you got it. 26 bucks on a $27.50 deal. let's call it a late fall close. you can figure out -- one of the biggest go-privates we've seen in a very long time. not rolling in tko the way they want you to. even so, it's a big number, req required, as we talked about, why it took so long, the financing, the equity financing. >> it's interesting, david, i'm not going to comment drirectly n endeavor, because they're my agent. we don't have issuance.
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we are going to get some issuance. i know jpmorgan has some things in the pipe. the fact is, we are still retiring stock at a higher rate. the refiners retired a huge amount of stock. caterpillar. we don't have issuance. that's one of the reasons why we have a put. >> and then that raises the larger question just in terms of how many public companies there are, and so many -- so many fewer companies are public now than 20 years ago. >> i think that's a great point. we have a lot of companies that came public, the 600 of the era, and there's a revulsion -- again, thank you to michael -- a revulsion to ipos because of how much money was lost. >> we've talked about the creeping lpo in the stock market for a long time. >> there's still some reality to it. we have the ge break-up. i tried to get jensen huang to commit to a soft split like the 50 to 1 we got from chipotle, which, by the way, no institution will put back at all. >> nvidia's not doing one?
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>> jensen said that he might do it. he said that was probably not the right moment when i asked for it, which i agreed. >> jim, you never -- you know, on a.i., nvidia makes me think of a.i. i think of steve cohen's comments about a.i. and how much it's helping his business, but you came back a little more concerned, and you haven't really articulated yet, to me, why you're more concerned. >> okay, let's talk baseball. i asked about how we get -- could a pitcher, a robot, pitch a perfect game? could it pitch like san dy kofa? if they're doing everything better than us, at a certain point, then i just say, listen, i want to run a company, but i don't want any of us. i want them. >> so, your concern is that it will ultimately result in fewer jobs? >> i just hitherto thought they were great productivity creators. i still believe that. that's the servicenow/salesforce model. but when i hear about their incredible superiority in so many things the robots do, i
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think if i were to start a new company, i would hire far fewer people. i'm not saying i would fire people, because people, once you have them, they cost money to fire them. but i just think that i would open a warehouse logistics company, and i wouldn't have a soul working for me. >> after the printing press, the automobile, the steam engine, electricity, the pc, the internet, you think this is the one -- >> and the phone. >> and the phone. this is the technology that's going to hurt employment? >> i think that this technology will make it so we put money and people elsewhere. they cannot do in a warehouse -- i mean, a robot, i've seen -- i saw visions of a robot picking -- if they knock over something, the robots pick it up very quickly. remember, no one gets hurt at a warehouse where it's all robots. and safety, absolutely. >> so, you're really folding in robotics to the a.i. -- >> the robots that i saw, not the ones that couldn't pick up the cereal box. >> not the ones that weren't mixing the drinks properly.
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>> that robot had no game whatsoever. i'm going to be behind the counter. >> what robots did you see that were making you think it's coming? >> no, it's -- this is the vision that i got from the person who's in charge of robotics, because these are not power powered by blackwell. these do not have game. the new ones are just -- i think we have people loading boxes. that's over. i think the manual labor trade is going to be displaced dramatically, because the safety, the idea that a robot is at the helm and can do it better and doesn't get hurt is huge. >> so, now, we're back to cohen's pieces of leisure travel and golf and things we're going to do with our extra time. >> i think cohen was spot on. that was a great interview. i think he's spot on, except for when he gives away two older pitchers, david, whom i happen to love, for some people that are players to be named later, you know what i mean? >> yeah, and he's still paying a lot of their contracts. >> isn't that terrific? isn't that a generous guy? >> he's very generous.
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maybe it will -- i remember masa from softbank, many years ago, when we did an interview, talking about the coming of a.i. >> what'd he say about layoffs? >> he missed it entirely in terms of investing in it properly, at least at that point he did, but he was talking about, we'll all be sitting back being fed grapes and fanned. >> i just think there's going to be a radical shift, because the reason why i'm not as perturbed about it is you can speak to the computer. you don't need to go to stanford anymore. i'm talking about a shift of people out of dangerous jobs into jobs that are safer. there's a lot of dangerous jobs. >> you're also talking about fewer jobs. you are. that's your concern. >> i am. i just think they're brighter than us, so they can outthink us at a lot of different things. we can't outthink them. how are we going to outthink them? we programmed them, but we can't -- look, if you watch every single movie made about
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ca cary grant, you'll be smoother than cary grant. >> nobody can be cary grant. what are you talking about? a robot is going to become cary grant, greatest movie star? >> you can make someone look like cary grant and talk like cary grant and star, and that will be a robot. you can't tell the robots from the people. >> you can't tell the robots from the people? >> you can't tell the proebts fro robots from the people. you can't. in the new iterations, the robots look just like people. famous people. lincoln. >> can i become cary grant? >> i'm telling you -- >> is it too late? >> lincoln, who had extra tickets to american -- i didn't know he had extra tickets to "american cousin." he had a couple extra tickets. >> more short-term, ulta's underperforming today, presenting at the jpmorgan retail conference. two months into the fiscal year, we have seen a slowdown in the total category. we've seen this growth rate come down probably faster than we anticipated. >> and that is unbelievable, because he is a very good
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operator, and -- kim bble -- an this had been the way -- they were the great democratizer of a product, and they even get estee lauder in there. that's surprisingly bad news. surprisingly bad. >> we didn't mention the downgrade of five cost, dollar tree. >> that was extreme. costco is having a terrific time. five below, not doing well. before we get too crazed, dave & busters had a very good quarter, even with a minus seven comp. symbol, play. that's doing quite well. >> stock was up six premarket. >> best performing group right now is probably the banks right now. >> oh, sure. oh my. a.i. >> that's just rates, right? i don't know. bank of america is up 1.4%. citi, moving up again. citi, man, what a year. 23% gain in that stock. we talked about it earlier in the week. wells fargo, one of your favorites, also.
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>> charlie scharf. look. charlie scharf, the chart is unbelievable. going back to the old 14 multiple of the warren buffett days, it could happen. >> are you going to -- are we going to go into the prints hot again on banks? >> i think we're going to see good numbers. i think it's reliant on ted pick from morgan stanley not cutting our heads off, the new ceo, because gorman -- by the way, gorman is on the board of disney. >> yes, he is. >> but the last two quarters of morgan stanley were suboptimal. >> they were. that's one reason why it drags dramatically the rest of the group. >> gold has been incredibly hot. we're getting ism services in about 15, but first, some pmis. let's get back to rick santelli. hey, rick. >> yes, these are s&p global. this is the services and composite. these are final reads. these will replace the readings of a couple of weeks ago. 51.7 was the mid-month read. it remainz at 51.7. what is noteworthy here, 14 consecutive months over 50.
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obviously, the service side is humming along better than the manufacturing side. and 51.7, well, it's the weakest of the year. as a matter of fact, you have to go back to, well, a december of last year to find a lower number, but nonetheless, still all above 50. if you look at the composite, there was a subtle change. 52.1 versus 52.2. also 14 consecutive readings above 50, and all of them are hovering right in the 52 range january, february, and this march final. yields, wow. yields have zoom, zoom, zoomed. yesterday's close was technically significant. the highest yield close of the year for many of the treasurys outside of two-year. 4.32%-ish was the double top in tens. looks like 4.5% is coming quickly. we still have ism services pmis to come up at the top of the hour. many traders like the granular look of those a bit better. "squawk on the street" will return after a short break.
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take a look at micron, we're watching the developments of the earthquake in taiwan overnight. the biggest earthquake there in about a quarter century. several killed and others injured. micron has said, and taiwan semi, too, watching for signs of chip making production being curtailed. maybe better pricing. stock is up 1% in a roughly flat
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let's get to jim and stop trading. >> the most popular stock on mad money is sofi. and they come out with a piece $10 target, things are getting better. that's a great relief for people concerned perhaps there was a convert done that issued a lot of stock and crushed it. so maybe this is the comeback. i hope. yesterday you said you thought we were at a pivotal moment. >> i think the interest rates are not gone. we have to wait to see what we have on employment. but i don't really trust things here. i just don't trust them yet. still over bought. b of a had a great table last night. up every year since '87. >> looks good. it can happen but we have to shake it off. i think of what steve cohen said about a.i. saying i hope you realize you can stop selling nvidia, the ones related to a.i.
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the market is soggy. i like the fact that new core is up, we've had an industrial selloff maybe that's a good sign. >> tonight? >> i have david's favorite, shark ninja. >> shark ninja. >> shark ninja. they make the finest vacuum cleaners there is to be had. >> other than dyson and other brands. >> price point. >> yeah. price point. and joe hinriches is coming on with a work around for baltimore. i'm interested in baltimore, the city of philadelphia we're step children to new york. i don't like that. the stock market is great. not bad. >> jim, busy week we'll see you tonight. "mad money". when we come back, some ism services in a moment. ideos,
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welcome to another hour of "squawk on the street" i'm sara eisen with carl quintanilla and david faber live from post nine of the stock exchange. looking at stocks in the early action, dow little changed same with the s&p 500 and the nasdaq after a selloff to start the week on the back of the high ertreasury yields. looking at bonds right now. read on adp came in strong. two year yield 4.7. it's been inching higher all week. and for the past few weeks on the back of mostly stronger data. be beneaththe surface, strength in industrials, materials, and financials and energies today. weakness in real estate, technology, why the nasdaq is l lower. 30 minutes into the trading session, here are big movers
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we're watching. ulta under pressure after warning of a weak consumer at j.p. morgan's retail conference. dave and buster's surging. intel one of the biggest losers, revealing financials for the semi manufacturing business, reporting an operating loss of $7 billion in 2023 on sales of 18.9 billion. the first time intel has disclosed revenue totals for the foundry business alone. and watch auto, ford a rise in q1 and tesla under pressure after falling on weaker delivery numbers. various wall street calls out this morning, including j.p. morgan cutting the price target on the stock to 115 from 130. tesla now at 166. off about a third of a percent. dow goes positive on this services number. let's get to it with rick
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santelli. >> i'm going to go right to what's moving the market here. ism services priced paid for the month of march at 53.4. that doesn't so so intense does it? the issue is 53.4 we haven't had a reading that low, since march of 2020 when it was 50.4 because the readings have been so high. that is a direct response to that without a doubt. we are expecting a number over 58. our last look in the rear view mirror was 58.6 that was the weakest reading going back to december of last year this just escalates that. back to the headline number at 51.4, the weakest since december. went over prices paid on the employment side, considering we have an employment and today's adp was stronger than expected. many say it's responsible for yields but really a lot of
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technical features in the treasury complex. 48.5 unemployment. that's back-to-back readings under 50. finally new orders, 54.4 the weakest read of the year. the numbers aren't tstellar but the drop in prices trumps everything and we were 200 basis points over yield than the gra german equivalency. >> this is the number the market is craving, weaker than expected on services, the hot part of the economy but not in contraction territory so it's not recessionary but weaker and the prices paid, as rick pointed out comes in weaker and that's why the market likes it. the other big story of the day is jobs. we'll get a jobs report on friday. the expectation is 215,000 jobs
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added for the month of march, adp, 184,000 jobs added in the month of march,more than expected and the biggest jump in hiring since last july led by leisure and hospitality. few things to pull out. number one it's big firms. big jobs are the big hires right now. and then the other one on wages. you know, they break out job changers. people who change jobs and how much more they get paid when they change jobs. a 10% rise for job changers. and that was high. that was the biggest one also since july, biggest jump in pay, came in financial services, construction, and manufacturing. so we look at every single metric to figure out how the fed might interpret inflation, just like prices paid, services down, this one goes up. see what the hourly earnings look like in the big jobs report
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in march. but you don't want to see a cooling job market where wages remain elevated for a fed intent on bringing down inflation. >> this wall street journal story about the jobs not adding up and immigration helping to explain why and the discrepancies and surveys and the ability to absorb more jobs without generating more inflation. >> that view is gaining steam. goldman sachs has been on top of that. been talking about that. just the supply has gone up with people coming into the country which perhaps is keeping the jobs market pretty tight. there has been a discrepancy between household and private sector jobs and now seeing things like smaller firms hiring less than larger firms. one metric is the small business hiring intentions coming from the small business survey. that's the three month ahead hiring plans in the orange line preponderate it does track the
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private payroll data well. it's a leading indicator and it shifted down. so will private payrolls follow? that's something people are watching. small business accounts for about a third of the total employment in the u.s. depending exactly how you define it. so it's important and that's why we watch things like the confidence measures. as far as the fed. we had a lot of fed speak. we heard from voters saying that they don't know what they're going to do more than the market knows what they're going to do on interest rates. both of them not ruling out three cuts as a probability. i think three is reasonable but a close call says loretta mester. the feed speaking is heating up, but it's not actually giving us much in the way of divergence or tradeable new information. >> interesting to get a hawk like mester and a dove like daily saying three baselines.
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we'll get powell today and barr and kugler. didn't hurt that euro zone came in 2.4 below expectations. >> it was a pleasant surprise. and now there's -- now the market is betting on a june cut from the ecb. they're more confident about a june cut than a fed cut for the ecb than the fed. they have a meeting next week, not a probability they're going to cut rates yet they have service inflation in the euro zone at 4%. which is sticky. however good to see the headline come down. good to see core go below 3% at 2.9% for europe. all welcome news for the central bank and the fed since they're correlated. and this morning, the macro and the expectations for the fed. i thought it was worth listening to. have a listen. >> expects three cuts. i think that's the number.
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i don't disagree with that. i think inflation has been somewhat contained. i think -- i mean, ultimately what it comes down to is that a true statement or not. the fed thinks it's going to come down to 2% inflation rate. >> what do you think? >> i think that's going to be hard. >> tricky to get down to 2% but still reasonable to expect three cuts because inflation is in check. that pretty much jibes with where the market is right now. although the market is jumpier lately on evidence of reacceleration on inflation and the broader economy. second quarter getting off to a rough start s&p coming off the biggest one day drop. our next guest says buy cyclicals. savida is here. great to have you, welcome back. your notes are like an enor the
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f fin drip the last couple of months. does the gut check this week change any of that? >> no. i think we're on track for gains throughout the end of the year. obviously we're a few percentage points away from the year end target which we just recently raised. i think the net message of the data and signalists and analysts and everything we listen to is up rather than down for the s&p. the idea, when i look at positioning, i don't see euphoria. i see cautious optimism maybe on a few themes like a.i. or glp 1 or now it's shifted to power but i don't see the broad based bullishness on the market. look at the average active mutual fund, active manager, the beta relative to the market is the lowest we've seen since
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2008. if everyone was looking for the bull market they would be long high beta stocks and they're not. i think we're in the wall of worry phase. you know, i still -- i would still say the direction is up from here. >> you recently went to 250 on earnings for this year. >> we did. >> next year -- >> we're looking for a 10% incline on earnings next year. the idea is we're tracking solid earnings growth. had margins remain surprisingly flat, not down as everybody was expecting. and i think that means that operating leverage you can get from a demand recovery is going to be that much healthier. we increased our earnings forecast primarily on the health of corporate margins. it's nice to see that corporate america has been able to navigate 9% inflation, then 4%. this has been a wild roller coaster of cpi prints but
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margins have been shockingly stable. >> we heard a moment ago from steve cohen, but something else he shared was the idea that the productivity improvements, i think i'm getting this right here improvements from a.i. have not been fully appreciated by the market. i'm curious how they figure into the earnings estimates or overall theme? >> we're at a point we're seeing companies do the right thing, spending on automation, spending on efficiency, which is what they do when you see signs of labor inflation. a couple of years ago after covid you see automation companies like industrials, now a.i. reap that cap x, they were the cap x takers. i think at some point you want to stop owning the cap x takers like the chip companies and you want to own the companies buying the stuff to do things better. we might be early in some industries and later in others but we've already seen shifts in the job market in skill sets.
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think about python programming. that used to be the number one thing that everybody looked for on a tech person's resume. now you don't need a python programmer because you have a.i. to program for you. i think these things are happening real time. in certain industries it's going to be slower and other industries it's already happening. are you not afraid of rising treasury yields and a stronger dollar starting to manifest itself? >> i am. that's the risk. where i see upside risk in rates is on the long end. the short end, i think 5% is manageable. even with no cuts this year i think it's okay for the s&p. but the long end, the sources of demand for treasuries are gone. it used to be who was buying treasuries, the fed, china, japan. none of them are buying anymore. so i think just that demand
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vo vacuum is part of the problem but the angle is part of the problem. the reason it could move higher is better long term growth expectations and that's starting to percolate with your average investor. the idea of a positive growth surprise which wasn't on the table last year is now becoming part of the conversation. >> finally, ft did a piece this week looking at corporate bond issuance arguing a lot of issuis issuers are front loading. >> our rule of thumb which has worked almost every election year so probably won't work this year is that volatility and the vicks picks up from july to november ahead of an election so that's when you want to be more cautious, quality oriented and come november, regardless of the outcome you see a year end rally on that uncertainty removal. so i think that could be the sort of the play book, obviously
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we'll wait and see, we know little about the election. what i feel good about when it comes to the presidential election, the two things that both sides agree on are moving ip out of china back to the u.s. and creating a manufacturing renaissance or creating jobs in the u.s. both of which are pro cyclical, pro tech, pro u.s. economy. and i think those are basically the reasons we're bullish on cyclicals and the idea the u.s. could continue to out perform the rest of the world in the 11th 12th -- i don't know what year it is of the s&p crushing it. >> thanks, savita. >> great to see you. as we head to break, what hedge fund manager steve cohen is saying about bitcoin and investing in crypto. >> oil, higher, some on the
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street expect prices to go higher. especially this summer. aroland it is decision day for shehders in that proxy fiengt. t fight. the latest on the voting. "squawk on the street" is right back. when you need to prepare for unpredictable adventures... (gasp) you need weathertech. [hot dog splat.] laser measured floorliners front and rear. [drink slurp and splat.] (scream) seat protector to save the seats. [honk!] they're all yours! we're here! hey, i knew you were comin'... so i weatherteched the car!
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course you saw nelson peltz. and to remind you, this started back in january of last year. that was when you heard, actually, peltz say the proxy fight -- well, he mounted the first campaign and then said the proxy fight was over and then started all over again. but today's vote is going to bring an end to the whole thing. it has largely focused on succession planning certainly that's been a point of contention from those who supported the efforts on gain two board seats, pointing to the failure of course in the elevation of bob chapek and the many times that iger's contract was extended prior to that. they say they've got it under control. we have obviously had karen, you a had james who's part of the committee there. tryon saying the board would be better with peltz on it in the
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transition and keeping in mind what shareholders care about, the higher stock price but the stock has gone up and that may be one key reason why disney does seem poised to emerge vict victorious. >> tryon's point is the competitors -- >> against netflix. it depends again if you compare it to warner brothers or paramount, it's a different picture than against netflix. >> sure but they have the parks. the parks are 70% of profit. >> and/or our company, actually, doesn't look so great either compared to comcast, but parks are one. >> share price under performance, succession planning, executive conversation entering into the conversation here. you say disney is poised to win. it does -- i am curious as to where that is coming from
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herschel wwho's leaking it. they pointed the finger at disney last night as far as leaking information about institutional shareholders voting in favor of disney, why disney would do that and whether it's allowed by s.e.c. rules to do that. >> acman always has to be a part of the conversation. >> thought it was a good point. >> it's not clear to me that he's right that disney is behind the leaking. i think i'd leave it at that. >> could be the shareholders themselves. >> you have another activist in there as well. blackwell. the -- they have access to the information as well. i think disney knows it's not necessarily a good look. all that being said, in terms of my reporting it would appear they are poised. we'll see, a few hours from now, what it looks like. to have high 50s percent let's call it of the vote. >> i do wonder how bob iger and the board will take it, if it's
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as close as high 50s percent, that still is almost half the shareholder base agreeing with nelson peltz. >> that's a good question. you know what i'm dogoing to do? >> you're going to ask him. >> i'm going to ask him. but let's continue here with peter. tomorrow it all starts over again, so to speak. disney can move its attention to the future. what, in your opinion, is sort of key for the company as this year unfolds from here without the distraction of the proxy fight? >> i like the way you started that conversation, i appreciate it in your video roll before this james gorman's comment that so much of this proxy battle has been backward looking and it's time to look forward. i think this annual meeting drama and the proxy battle is based on real substance and fascinating, but actually, with disney trading at $123, now 122, thank you, per share, the stock price is certainly looking
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forward and analytically we should too. >> stock prices, sorry, is saying what? >> is looking forward. 123 is a generous enough stock price that it's discounting a huge improvement in profitability at disney and that was the primary bone of contention in this proxy fight. so making the case that the stock price has begun to look forward and it's time for the conversation about disney to as well. >> they have to deliver to a certain extent. what is the key thing there? being able to deliver on the promise of profitability, for example, in the direct to consumer business? >> that's the number one. the board and the succession issues are important, they're critical, they won't be resolved in the next few months. they shouldn't be resolved in the next few months. the streaming profitability and broadly the media segment profitability debate has been the thing about which you could not only have a point of view
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but demonstrate progress at disney and so here are some numbers. in 2022, when they first took a position in disney, disney's operating profit was negative 3.4 billion in the dtc segment. that number was actually worse -- or better than their underlying reality of the business because disney's cash programming spending. the amount of money spending on cash, on content was ahead of what was on disney's income statement so the cash losses were greater. today we're forecasting, 2026, direct to consumer operating profit at over $3 billion. so that's a $6 billion swing you adjust for hulu's idiosyncrasies, it's a 14% operating margin going forward. dids has done a lot of the right things in terms of setting up the outlook. >> the backdrop of course continues to be the decline of the legacy media business, so to
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speak, i hate to say that, of course, because it includes the likes of what you're hearing right now. what are your forecasts there? the acceleration is only continued in terms of cord cutting when many thought it would start to die down. does it get worse before there's any sort of plateauing? >> prior to this conversation, i was refreshing in our disney model and i observed during the same time period, 2022 through 2026, as i just mentioned, the forecast, the linear tv business within disney, operating profit contribution went from 5 billion in '22 to 2.5 billion so it's a big headwind to the company's growth. the good news is the contribution looking forward is small enough we can probably spend our time more productively focused on dtc and theme parks. however, defending that
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$2.5 billion profit stream is important to the company and they made a lot of noise about how espn is going to begin the evolution. but there's more uncertainty than clarity on that topic. espn will have a hard time extracting enough revenue from enough households to recreate the linear tv revenue stream. >> it sounds like you're focused on pure profitability metrics. do you, peter, and clients and investors you talked to, have concerns about governance at this company? >> for sure. and they will play out -- the importance of governance will play out over the next few years. the most recent scuttlebutt is that the successor will come from within disney. and there's several credible candidates. we think whoever takes over will do so with a heightened sensitivity to what went wrong last time. as they say in life the mistake
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you make next time is never the one you were afraid of. it's never repeating the last one. so we're confident they'll choose a competent successor and bob iger will step aside. there's a debate about the elevation of james goverman and carolin everlin but the board still lacks credibility. >> thank you for your time. >> thank you. we are going to or i'm going to have an interview with bob iger tomorrow morning at 9:00 a.m. eastern, assuming i can get out of here with the high winds. you're going to china, so that's nothing for me to go to l.a. >> you're going to l.a. for it? >> yeah. >> that's exciting. >> i think you guys will be all right. >> any travel plans you want to share? >> i'm going to denver. >> again? >> so the three of us will be on the roads. >> cities for success this is exciting. >> exactly right.
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>> when do you leave? >> tomorrow. in case you're curious about our travel plans. >> i'm going with the treasury secretary. >> it's a long trip. bitcoin under esreprsu on the week. what market vet steve cohen thinks about that asset with the dow positive in every sector green except for staples. don't go away. specialists work together to make sure your portfolio and wealth are managed in a tax-efficient manner. it's what you keep that really matters. why not give your wealth a second look? book your free meeting today at creativeplanning.com. creative planning -- a richer way to wealth.
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welcome back to "squawk on the street." nice rebound for bitcoin after losses yesterday. the crypto now nearing the pivotal halving date set to take place in april. the event where reward for mining new blocks is halved. crypto still up more than 50% since january. and steve cohen weighed in on the asset today. take a listen. >> my son is really into it so he had me like play around and try to figure out how to like, you know, transact on coin base, so i bought a little bit. i think ultimately it's about
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use case. will crypto develop use cases. so bitcoin is interesting. but it's not -- it's just a piece of that whole ecosystem. >> made a point to make a difference between bitcoin and the block chain and crypto, talked about fwofl, megolf, med, a.i. >> crypto fans are happy to have him in his quarter. >> yes. still ahead, one of barren's top investment advisers, where they're seeing opportunities in the market. stay with us.
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at least nine people were killed and more than 800 injured. the earthquake prompted tsunami warnings in taiwan, japan and the philippines that were later lifted. special counsel jack smith criticized judge aileen cannon writing that her understanding of key issues seems to be fundamentally flawed. it's in response to the judge's order to write jury instructions. and 27 million people are under risk of severe storms after tornados, flooding, rain, snow swept across multiple slates tuesday destroying buildings and downing power lines. the system is moving east and is forecasted to bring heavy rains and high winds and winter whether from maine to florida back to you, david. treasury yields are hovering at fresh highs as investors are
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working through ae host of new fed commentary. let's get to steve liesman with the sit down he had with fed president bostic. >> just one of a bunch of great sitdowns on cnbc this morning. atlanta fed president bostic in an exclusive cnbc interview said he's looking for progress to bringing down inflation to slow this year so he continues to forecast a single rate cut this year. and one that isn't enacted until the fourth quarter, months after markets have priced it in as colleagues have forecast. >> if the economy evolves as i expect, continued robustness in gdp, employment, and a slow decline of inflation through the course of the year i think it will be appropriate for us to start moving down at the end of this year. the fourth quarter, as -- we'll
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have to see whether the data come on. >> important to remember, bostics with who is a voter this year didn't start out as a hawk but has evolved to one. a couple of his colleagues are saying we need a couple of more months. bostic is saying five more months. you can see 16 basis points in the past three months compared to 44 basis points of decline in the prior three when it comes to core pce. he also noted the items rising at 3 and 5% annually. it's unclear whether you join bostic in this, i don't know if you call it wait until halloween, thanksgiving or christmas cut. we got another strong jobs report from adp this morning and for the first time since october 2022 we have the ism services and manufacturing industries.
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so the economy appears to be firing on both of those cylinders. >> the prices paid, biggest drop since march 2020, that was good inside the services number on the inflation front. >> yes. >> it's like how many ways can the fed presidents figure out a way to say we're patient and waiting and need to see more progress on inflation. i think the question for inves investors and the fed is what does progress look like? what's going to be good enough? >> you know, sara, i think investors know what progress looks like. there is one question on the side here, which is is the fed hell bent on cutting -- we have powell coming up at 12:00 this afternoon, and it's one vote to rule them all in a sense. what the share thinks tends to be the most important. i tend to think when i see the
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june rate probabilities go down. i think i saw tell me come down in the wake of bostic talking in the 50 to 55% range. i feel the market and the fed are dancing in sync so to speak when the bad data comes out, the market prices in patience. and that's different if you remember back in december when the fed said three and the market said six. much more con grew ens in terms of outlook now. >> we have to see, march, april, may, before june. >> yes. the markets trying to bounce back from two days of losses on what's a rough start to the fourth quarter. the next guest said to focus on tech, financials and industrials. she helps manage $75 billion in assets one of bar ren's top five registered investment advisers
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in 2023. thank you for joining us. why are you focused on those three sectors? >> thank you for having me. tech obviously has been a huge workhorse for the overall market. so that will continue to be a major focus as we go into earnings season. but we've seen some strength out of the cyclical sector such as financials and industrials and they've outperformed the s&p 500 year-to-date. so we would like to see that continue and we're seeing the economic data come in better and stronger so we'd like to see that come through on the earnings for the cyclical companies as well. >> financials are interesting because we have the steepening of the yield curve and that hit the regional banks, kre and financials broadly, although they've done better than in recent days in terms of market leadership. so what do you expect from here? >> absolutely. so there's been a bifurcation between the larger cap names and
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the smaller regionals and we like the larger money center banks such as j.p. morgan they continue to be high quality. we'll see some additional information in terms of overall financial conditions, activity, whether or not we're getting additional deal flow, trading. so we like those names in order to kind of get that feel for how the overall economy is doing. >> we've been looking at some trends, for example, the logistics manager's index, which is showing a ramp up and sort of encapsulates the notion that the economy is not just finding the footing but accelerating a bit. does that lead you to transports? >> absolutely. i think transports are going to give us a sense for any sort of supply disruptions from the baltimore bridge collapse and where transportation has the bottlenecks and whether or not volumes are keeping pace with the activity we're seeing and whether or not pricing is going
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to be impacted as well. we'd like to see a lot of the data come through from individual companies during earnings season. >> does it matter to you as far as increasing exposure, decreasing expotsure whether we get a rate cut or three from the fed this year? >> as long as the economy and economic data stays strong and resilient as we've seen in the last several months and as long as, you know, financial conditions aren't getting stressed. we're not too concerned about whether or not the fed goes in june or, you know, later on in the second half of this year. i think the key positive for markets is that the fed is no longer expecting to hike. it's just when are they going to cut and by how much. but i think everybody is leaning in to the fact that the economy is strong and the fed is going to eventually normalize interest rates at some time this year? >> i know we hit financials but
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industrials are also a focus of the funds. rtx a name there. so many issues with the turbo fans, the engines, why is that a stock you like? >> we continue to like it. it trades below market multiple. it's a high quality name. it had the issues in the past with the gear turbo fan. but we continue to like the growth of the overall aerospace industry. so we continue to like the balance for rtx. we think it's a strong company for the long term. >> thank you for joining us really good to talk to you ayako from wealth enhancement. i said wealth management, sorry. oil hitting the highest price this year, over 85 a barrel and climbing. brent above 9 t89 today. we'll talk about what it means for your portfolio in a moment.
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welcome back to "squawk on the street." let's turn to energy this morning. oil settling above 85 a barrel the highest settle since october 27th. it's helping energy stocks hitting highs across the board. the global energy etf trading at levels going back to september of '14. halima kroft, a cnbc contributor. good to see you. >> thank you for having me. the situation in damascus is being argued as it might be an accelerate to this, is that the case? >> the concern is with the attack on the iranian consulate, the killing of three iranian generals are we going to see a meaningful escalation in the conflict. the iranians have pledged a harsh response to date they have shown little willingness to get
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involved in the fighting. so the question is this going to provoke some type of escalatory action. we are wondering if we're seeing more israeli action targeting iranian sites, a ground operation in lebanon, so the conflict doesn't look like it's winding down. what does the escalation look like? >> does is spr join? >> it's an issue for the biden administration in the summer. we had the opec meeting today, the june 3 meeting is going to be when opec basically makes a decision, hold the line in production cuts, put more barrels on the market. but if they're slow in ramping up, i think the biden administration will have little option than to go back to the spr. >> to be clear on iran, is it your view the market is under pricing risk of escalation, including iran? >> i think the market basically decided to turn the war into
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background noise when we didn't have an initial spread to iran. now the market is saying wait a second, russia/ukraine is something we have to watch because we have ukraine targeting russian energy sectors. what if we have a situation where the war like we saw in 20? remember, they hit those tankers off the coast of uae. we had saudi arabia's facility targeted. everybody is watching for iran, because we have seen iran target energy assets before in the region. >> well, given your battleground, particularly, way back, what do you think? what is your sense here in terms of their willingness to take this up a level in iran? >> i think iran has been, you know, surprisingly cautious in the sense of, they'll let the houthis do the fighting, they'll let hamas do the fighting. what i think is the wild card is really, what is israeli action going to be? >> you have 80,000 internally displaced people in israel. the question about, will these people move back or be able to move back to the north, unless
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hezbollah moves off the border in lebanon. the iranians have made it clear that they're not going to get involved in the war to back the houthis in a meaningful way, beyond money and weapons. hamas, the same thing. but hezbollah is our most important proxy. if you do see a repeat of like 2006, when there was a ground invasion of lebanon, most people think that that is a pathway to direct iranian involvement. >> but also, they have this key member taken out, and have vowed revenge. >> and the key member of the irgc quds force, he was running the operations for syria and for lebanon. he actually sat on the hezbollah, basically, operating committee. and the question is, was the israeli action simply about eliminating a few individuals, or was it about really trying to disrupt the weapons highway that runs from iran to lebanon, potentially in advance of a ground operation? >> finally, in light of all of
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this, is china demand material or not? >> china demand has held up better than expected. i think that's part of the reason when we think about why opec isn't putting barrels on the market now, they want to see where demand shakes out. but certainly, we have not had the demand, you know, crash that some people anticipated. demand is solid, and now you have concerns about supply. >> and we're not even to summer yet. >> we're not into summer driving season. zblai >> still ahead next hour, pimco's latest outlook for stocks. they're arguing that inflation could linger for longer. we'll talk to one of the economists behind the call on "money movers." don't go anywhere. dow is now accelerating, up 100 points.
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hopefully no magic mushrooms this time, but there are important issues to get through, including this idea that she has brought up lately about dumping over capacity concerns especially from environmental products like evs and solar panels. and i think what's interesting, also, is just the posture of china and the u.s., and the power dynamic. it's shifted a bit, just in terms of the outperformance of the u.s. economy and the underperformance of the chinese economy. and there's the two stock markets, just stock markets don't equal economy, but it gives you a sense of where investors have been focused and excited about. and it's not china. and foreign direct investment has been hurt there. and they've welcomed u.s. ceos and said they're open for business. and so i do wonder how that's going to influence the dynamic of these two key leaders at a point where the geopolitics and this national security concerns remain very tense. and very confrontational. >> there are so many, so many important issues, and i'm very much looking forward to, not
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just your interview, but what you're going to learn there, sort of a deeper understanding. because when it comes to china, it's so important, and yet i do find it difficult for us to fully understand it so much. >> and many of us haven't been pack post-covid. >> no. >> because they were shut for so long. i am curious to see what it looks like there, just in terms of activity. the other sort of factor here is taiwan. and obviously, that's front and center in our minds now with the quake and just heard that taiwan semiconductors is going to get back into production, but there's a huge reliance on advanced chip manufacturing, ai, in taiwan. and that's kind of the elephant in the room, in any of these talks with china. >> safe travels. >> thank you. >> and to you. >> to all of us. >> doing big, important stuff here on squat on the street. >> very big, very big. speaking of big, a bit of a rally going on here. our live market coverage continues right after this. amelia, weather. 70 degrees and sunny today.
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amelia, unlock the door. i'm afraid i can't do that, jen. why not? did you forget something? my protein shake. the future isn't scary, not investing in it is. you're so dramatic amelia. bye jen. 100 innovative companies, one etf. before investing, carefully read and consider fund investment objectives, risks, charges expenses and more in prospectus at invesco.com.
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go deeper with thinkorswim: our award-wining trading platforms. unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. and sharpen your skills with an immersive online education crafted just for traders. all so you can trade brilliantly. good wednesday morning. welcome to "money movers." i'm sara eisen with carl quintanilla live on the floor of the new york stock exchange. today on the show, new reports saying disney is set to win its proxy fight agains
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