Skip to main content

tv   Squawk on the Street  CNBC  May 17, 2024 9:00am-11:00am EDT

9:00 am
cnbc.com/pro. more details and analysis for subscribers. >> let's say the under and over is, what do you think, 69, 70. you taking the under or over on scottie scheffler? >> if he comes out i think he comes out with a vengeance. >> okay. happy friday, everybody. enjoy the weekend. i might be watching that later today. make sure you join us. >> i'm going to watch it. >> join us. "squawk on the street" is next. good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. david faber is on assignment. bulls look to close out a solid week with futures pretty steady. s&p aims as a fourth positive week in a row. that's the longest streak since february. the road map begins with china's housing hail mary, attempting to end its property crisis. reddit shares are surging striking a content and
9:01 am
advertising deal with openai, and as dom said, gameshop shares tumble. take two cuts its forecast in what it calls challenging times. let's begin with markets a day after the dow hit 40k for the first time ever on pace for its fifth week of gains. what did you make of all the fuss yesterday? >> i thought this was one of the broader attempts at a major milestone. and what led it was just incredible. i mean, you're dealing with a level of broad that what -- let me tell you, the most important thing was rates had only something to do with one stock out of ten. you could pin on rates. i think that's very important. i do believe most of these companies are just run by ceos that don't get enough credit. it's amazing to me that we simply are always willing to consign, i think that's because of the nonsense risk on, risk off, that's just something that
9:02 am
came up to confuse the viewers. i'm not crazy about it. i think what's happened here is when you get a guy like solomon, and he realizes, you know, goldman is not being run right, sasha nudell, when he decides to go all in on azure. we can't make cat boom or bust anymore. we have to make it so it's a secular grower. let's be linked to data centers, to oil and gas. these guys, up 100%. we're not going to just cater to the older demographic. we're going to go after gen z, after millennials and they're lifetime value customers. these are ceos who matter. even though we're stuck in a world of macro, micro, and what the fed is going to do, it doesn't make you money. it fills up the hour. you have to fill up an hour, 47 minutes, when you have almost 60 minute, you have to fill it up. i like to say, let's make money for people. if we do that, then nester, you know, whatever bark, nice
9:03 am
fellow. sea of love, was that? good title. but i just think that in the end, we have to help people make money. he blows up the model, comes out. rob davis, he just could do keytruda to make it when the patent comes off, we wouldn't have merck be one of the top stocks. >> jim is referring to the names that added most to the dow since 30k. goldman first, microsoft second. laggards were 3m, nike, and disney. >> 3m, mike came in, he was given a bad hand. and wow. he's come back with a vengeance. he's created a company that's ready to accelerate. that's all on him because he got a bad hand. it looked like a good hand. i mean, it looked like he was playing -- people looked like the 2s and 7s were wild. it turned out they weren't wild. he had a bad hand, but he's
9:04 am
augmented it. and i take a look at some of these guys. let's take a guy like mike worth. mike worth is an oil guy, but mike decided capital discipline, and let's give back in dividend and let's not blow the company up buying anadarko. these guys are meaningful. and you're going to say jamie dimon was the principal beneficiary of the fed rate cuts and also principal beneficiary of raed hikes? no. i talk about the great theory, but i'm saying there are people who do more. look at the hand that bob iger got. that's a bad hand. but it was an iger hand. there was a stop, there was a guy in there. a pit stop. he made a pitstop in there. now, they said if you don't have anything to say that's nice, just don't say it. nanny is never wrong. didn't know all that much. >> you're talking about
9:05 am
corporate dynamism. >> yes. >> is that enough to fuel a further rally, and did walmart yesterday answer concerns about the lower end consumer? >> doug hit it out of the park. >> best earnings reaction in almost six years. >> doug mcmillon, first, he had deflation in many aisles. second, he had some particular food stuff deflation that mattered. he understands the consumer better than any major mass merchandiser. and i thought doug did great. i mean, by the way, doug is not only -- he's so nonpromotional. i had to try to tell him that his fashion is great. i had to. i said, listen, doug, your fashion is great. the stores look fabulous. that's him giving the managers a lot of say. but i was blown away by how page after page of a recognition that the consumer scrapped. it was really a poignant piece
9:06 am
of americana. >> it's interesting because b of a last night looking for signs of the low end cracking of the consumer. not yet, they argue. if you look at wages versus pricing at the low end, it's still outpacing higher income consumers and has for years. and that's x grocery and gas. >> that's important because look, the preconception is everybody using a credit card. no, no. people aren't doing as well. i mean, maybe they have spent the so-called capital they built up during covid. i think it's not -- it's not the stuff that's found at walmart that's a problem. it's service means, between the lines in the home depot quote, which is also a very important call. between the lines there was the labor is too important. it's not the actual goods. and home depot can't do much about the labor. immigration can, but we don't know about the work permits
9:07 am
biden is giving. when you look through walmart, you know if you go there, it's the same prices as 2020, not 2019. almost nobody can bring it back to 2019, unless you buy their private label where they have a huge number of foods that are under $5. i wish wall street would go, analysts would go to walmart. but you can't go to one. you have to go to many wall marts because they look very different. it makes it so they look different. that's not what they're doing at a cracker barrel. they will. we can get into what cracker barrel is doing. but i thought the walmart was extraordinary. and that stock was deservedly up, and it's not done going higher because that was a remarkable quarter. they're not the costco model. sam's, maybe, and that means let's just do volume and make money with the card. i felt so good that america is reacting to what doug is doing. which is to make it so that he is bringing back the roll backs
9:08 am
that sam waltons s used to do. he told me, we're bringing back sam walton. there was one after 78 where you would go and it would have an ice chest from rubbermade, and it cost them $40 and they were selling it to you for $20. you say i beat the heck out of walmart. like that. >> you made your crazy eddy reference yesterday. are we in a crazy eddy environment where prices are insane? >> some of them are insane. they're fashion. doug doesn't -- someone is doing the fashion for doug because doug doesa an't seem to realize when my daughter wore the combat boots, i don't think he knew that was him. but the prices are crazy. they had valentine's day outfits for like $9 that looked like they were like $72. >> i know you tweeted out, i think it was a "people" magazine piece on clothes at amazon that are $20. >> look, the idea that apparel
9:09 am
is up, that's why -- i mean, david, i'm telling you that the labor department -- how could they be wrong, they're the labor department? they're wrong because they don't know temu and amazon. >> that was a good exchange. meantime, we're watching china rolling out new measures in hopes to stabilize their property crisis. eunice yoon is live with more. >> reporter: hey, carl. the support package is beijing's most aggressive yet. the focus of it is to convert unsold homes into affordable housing and also to encourage more people to buy new apartments. now, the package involves a $42 billion relending fund to help state-owned firms to buy inventory for that public housing. local governments would be leaned on very heavily. they would buy some unsold homes at, quote, reasonable prices.
9:10 am
they're also being urged to get more heavily involved with finishing stalled projects or creating the conditions so the projects would be completed and buying back land from developers in order to try to ease their financial burden. now, as for the potential buyers, the national mortgage rate floor will be removed from tomorrow and down payments ratios will also be cut. state media has been describing these steps as historic and the stock investors really did like these policy announcements. capital economics which is a research house said this could be potentially significant. it sees that new home sales could be up 10% in the first year but if the funding is sufficient. and that is a big if, guys. based on the size of the problem and also the current state of the finances at a lot of these local governments. >> $42 billion, that's great.
9:11 am
people in the know, people who know far more than i do said it could be a $6 trillion problem that they have. trillion, with a "t." this does not seem to be addressed by what people in it know are saying. >> yeah, but we see that beijing has been kind of reluctant to do a whole lot. it's taken a lot for beijing to get to a point where they're allowing state firms as well as local governments to have some type of intervention. the big problem is that the signal is that they don't want to pay for something too big because they have already had issues with debt. and also, that potential destabilizing impact, you know, any kind of major moves can make, and as you well know, the authorities here are very wary of anything that could create social instability. >> meantime, eunice, the data we got last night, industrial production with the wbeat but retail sales with a miss. a bit of a mixed picture there.
9:12 am
>> it was a missed picture, but it reflects what we have been seeing all along, that the government is kind of pushing the whole export and factory component of the economy. but the consumption really wasn't really there. so what we were seeing was a miss on the consumption as well as the investment, the infrastructure spending not doing so well. but then, the exports -- the industrial production was up. so again, you know, a lot of imbalances in this economy. >> eunice, when president hoover was confronted with a similar situation, he created a reconstruction finance corporation and spent some money. but was reluctant to do keynesian comes. what's the resistance to keynesian economics. this is a man, president for life, hanging out with putin,
9:13 am
you could argue, axis of evil or something, but he can do whatever he wants. why is he hoover instead of roosevelt? >> i mean, i think it, again, goes back to this whole concern about social stability. he doesn't necessarily want to do something that's so massive. they don't really want to pay for it. at least that's the signaling that's there. and you know, there's big question mark because this problem is so big, exactly what would happen if they made any dramatic moves. again, even with this scheme, there aren't a whole lot of details but people are wondering, so who is going to be made whole? you might have the financing. but is it going to be the developers or will it be the potential buyers who put down large deposits and could lose everything and are already protesting in some areas or have protested. or will it be some of these workers we have seen who are protesting because they're angry they haven't gotten their money
9:14 am
back or the suppliers? there's a lot of questions about what the government is able to actually do. >> wow. >> eunice, between that and your robo taxi reporting this week, your plate has been so full. appreciate it as always. >> as the guards here when we leave say, stay safe. when we come back, a couple gaming names to watch. we'll get to take two and gamestop, as gamestop is back to levels before roaring kitty returned to social media. oeg,l get to cannabis, bin hood. when we come back. car, this isn't the way home. that's right james, it isn't. car, where are we going? we're here. (♪♪) surprise!!! the future isn't scary. not investing in it is. car, were you in on this? nothing gets by you james. nasdaq-100 innovators. one etf.
9:15 am
before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.
9:16 am
9:17 am
you ready? -showtime. this is gonna be epic. it is, right. [ barking ] it's what the poster said. do you want to make out or? nope. i meant yes. he's a bon garçon. i give amazing sponge-baths. can i get a room? [ chuckling ] ♪ ♪ chef's kiss. these have been challenging times and in addition to delivering hits, we have asked everyone to dig deep and make sure the business is highly efficient, right sized, and that challenging and one of the most extraordinary things about our organization is the amazing morale and focus on the common good.
9:18 am
>> that's take two on the call last night following the company's latest earnings print. we'll talk to him later this morning at 11:00 a.m., as gta 6 pushes to next fall. >> yeah, look, and i know that people pushback say a billion and a half. i can't believe how much the old, the current gta makes, which just tells me that you can't estimate how much the new one will, the houser likes to make a perfect game. i thought that he was right to knock him on this. it's been very hard to quantify. it's a really, really hard game. it's going to be the greatest game ever. he's going to deliver that. maybe too soon, maybe you need another quarter. but there's no doubt this company is doing incredibly because they were starting to see results from zynga, match factory. this thing is a very popular game. i'm all in strauss. >> you would rather wait and have it done right, is that your point? >> it has to be. look, rock star that people who make it, they're perfectionists.
9:19 am
the reason that game holds up under all the different years and iterations is because they are just so clever. i think that strauss -- look, he's from the movie making business. he understands you can't rush great productions. and i think that in the end, when i look at take two and what he's done, analysts are putting up $1.6 billion back. i say wait a second, it's the push out that i expected from the point of view of strauss gave you enough leeway that i didn't think it was that big a disappointment. i'm all in strauss. he's done a lot of good stuff. >> as for gme, we got the mixed shelf file. we got the preliminary number below consensus. going to open below $22, jim. >> look, they're going to offer stock. they'll do it at the money so they're not going to club the stock. i wish he the done it the day before. i think they had to put out the horrible results before they do this. the thing -- there's a lot of things wrong with gamestop we never talk about. we talk about the kitty litter
9:20 am
or whatever it is, the fresh step this guy is making with $30 this morning. he's clearly ill advised. there is a real problem. it's an existential problem. for instance, the ncaa, the new games coming out, it was delayed because of the nils. i follow this closely because everybody in the office is looking for it. you preorder it. if you download it,it comes immediately. all right. if you go to gamestop, it's one to three days. and it's same price. so what is the advantage of gamestop? well, you might want the disc because you might want to go to a friend's place, have a sleepover. maybe it's okay to have a three-day wait. otherwise, why not just download it for the same price? what's great about gamestop is they can close. >> they can close -- >> they can close it. and then they wouldn't have to mess with it because it's
9:21 am
irrelevant. i matched it against best buy. assassins creed, there's 72 different assassins creed. they're all the same price. if i go to best buy, i can get the refreshed pc. >> is this all about extending and pretending, then? whatever hay they're able to make? >> that's good. >> i'm not saying it. >> maybe he's using the bed, bath, & beyond model. it's mpickleball court. i think gamestop, i remember when i went to livingston mall, which was an experience. there gamesstop on the first level and a gamestop on the second level. i was thinking, are you kidding me? i think it's fighting for relevance. i think it became the stock, it made sense to short it other than the fact they overly shorted it. it's an existential crisis. it's been one since i had paul on where he was -- he was fabulous, trying to make it a swag store. carl, look at the prices. they're no different from best buy. look at the time it takes, no
9:22 am
better to have it if you have xbox and just download it. and everyone who is playing with it, i urge them to go to one. i urge them to use it. i think they would say, we ought to switch and we should do it with foot locker. let's go on foot locker. they need to go to another one. let's pick another retailer that is struggling for relevance but as a vio that understands the business. really, i could go to the mall and find 20 other stores that are better. and i mean, kohl's bought sephora. they got the right, they didn't buy it. gamestop has to do something so different, so -- i don't know. like maybe with petco. >> you're not joking. something outside the box. >> there's nothing there. there's nothing. hey, let's have strauss on. you ask him about why gamestop exists. i think it's going to be a head scratcher. >> we'll talk to him at 11:00.
9:23 am
>> they could offer, i don't know, buckings has great sandwiches. merge it with gamestop. >> when we come back, cramer's mad dash and the opening bell. the dow looks to put together another positive week along with the s&p. stay with us. (ella) fashion moves fast. setting trends is our business. we need to scale with customer demand... in real time. (jen) so we partner with verizon. their solution for us? a private 5g network. (ella) we now get more control of production, efficiencies, and greater agility. (marquis) with a custom private 5g network. our customers get what they want, when they want it. (jen) now we're even smarter and ready for what's next. (vo) achieve enterprise intelligence. it's your vision, it's your verizon.
9:24 am
[crowd chanting] they ignored your potential, and mocked your ambition. but it's not the critic who counts. with every swing and block, your game plan never changed. ♪♪ some still call it luck.
9:25 am
let them. because you know what it's always been. inevitable. ♪♪ ♪♪
9:26 am
take a look at some gainers here. amd up on a report involving microsoft which we'll talk about in a couple moments. a little media in there as well. netflix, marvel rounding oheut t top four. opening bell in just about four minutes.
9:27 am
9:28 am
tamra, izzy, and emma... they respond to emails with phone calls... and they don't 'circle back', they're already there. they wear business sneakers and pad their keyboards with something that makes their clickety-clacking... clickety-clackier. but no one loves logistics as much as they do. you need tamra, izzy, and emma. they need a retirement plan. work with principal so we can help you with a retirement and benefits plan that's right for your team. let our expertise round out yours.
9:29 am
time for cramer's mad dash. >> there are times, we talk about ceos, and you said made that comment about people can really change things. julie mussina has taken on the cracker barrel and she's put out five pillars to redevelop. she's out of taco bell, now chipotle. she's going to fix it. they had to slash the dividend big. >> 80%. >> they needed to reapply that money to make the stores look better. not this quarter. this quarter and next quarter are going to be hurt, but she's going to reinvent this and it's
9:30 am
going to succeed. >> you think it's worth it. >> oh, yeah. she has to do so much reconfiguring, they can't make the numbers. i believe, i believe. i think she's real. >> let's get the opening bell. the big board, the wnba commissioner celebrating the league's 28th season. by the way, happy birthday to the nyse. 1792 today. super high international, chinese restaurant chain celebrating an ipo today. >> president xi, listen to us. listen to us. we're on your team. by the way, dave tepper's buy of alibaba the other day, joe hsieh, his wife was honored in a terrific thing i went to last week. that company is very
9:31 am
inexpensive. i know when you speak to dave, he would tell you maybe the cheapest company in the world. it's returning a lot of capital. it is very good. now, it's up in a straight line. if you come in now, that's probably incorrect. but there are fundamentals behind it. it's not this let's move into thas one. this is the stock of the day. so when he comes in, i did view jd.com for a trade for club members but i vacated that this week. >> i noticed morgan stanley cut baidu this week. >> ad market week there, that makes sense. but joe hsieh is engaged. by the way, he's an amazing businessman. he does a lot in brooklyn. he's a remarkable guy. i think that -- i think it's very much real, baba. it's just that you are in china. chinese stocks have historically disappointed you after they lure you in. i think you have to wait for it to come down now, but it's cheap and got a big buyback.
9:32 am
>> we mentioned yesterday microsoft potentially moving some of their a.i. workers to other countries. today this report they may offer cloud companies amd processors as an alternative to nvidia. >> good luck trying to get the nv nvidia. i think lisa su has a great product. by the way, in terms of speed, mi 300 is very, very good. i think the stock deserves, as i said last night, deserves much higher. but let's understand, it was always going to be theirs. it was always, and the combination, because hp told me, it was always going to be amd. it was not going to be nvidia. look, nvidia is going to report next week. everyone has been recommending them. there's going to be volatility around the call. i think that's very true. it's very difficult to live up to expectations, but i think nvidia has the blackwell transition that's going very well. you don't really have your current one is bad, you can keep
9:33 am
your current iteration. hat's off to lisa su, but remember, there's two components to the gpu. you have the training and then you have the inference. reddit is a more important gpu situation because they have a great deal with chatai. >> and openai. >> reddit, i mean, look, there are deals that you really want to be in, and then there are deals where it's like, why am i in that? both arm and reddit are remarkable. and you know, credit to steve hoffman. i know some of the redditers who are long-term redditers don't like there's more ads but he doesn't run that thing as a charity. it's a jigger not. he's doing so many things right. >> for how much consternation there was, how long it's taking them to go public, it seems to have worked out. >> absolutely fabulous. him on "mad money" and then to have bill redding on pinterest.
9:34 am
whoa. i mean, talk about a sight that you want. i want to gin up advertising just to be on pinterest. these two companies are remarkable. they're replacing like fox and, i don't know, tbs or tnt, whatever over there. >> we never really had a chance yesterday to talk about venue sports. the name for the bundle. >> how do you like that? remember that? what was that? kenview? i believe in venue. i just wish it wasn't done so quickly. it seemed like an emergency situation. i happen to like parent company of the network, comcast bundle. >> stream saver. >> david was here when -- i don't have to imitate david for what he said. because he didn't say anything. >> there's a look at some of the
9:35 am
media names, after the up fronts this week, the moffett conference where iger talked about the puzzle he had to unravel coming back into the job. >> people told me netflix, blow away. aren't you tired of them? they're like, we can be netflix? do they watch netflix? it's fantastic. >> $40 million in the ad tier is not what we would have thought a year ago. >> netflix, look, i mean, a lot -- one of the things i think the american executives, they have to be a little less xenophobic and recognize when you have series coming out of iceland, iceland is a killer. i literally went to see where in iceland netflix presentation was made. >> south korea, and then advertise it all around the world. >> it doesn't matter. they're willing to go -- they seem to understand that young people, young people don't even
9:36 am
have the sound, they just have titles. they're like, dad, you need the titles. first, i thought they were deaf. now, they like titles more than they like listening to languages. >> jim, we mentioned chips. any reason to be concerned about ami last night? >> i love the call. gary dickerson was amazing. people don't understand, look, there are people who are selling the stock instantly, these are people who should just go buy the cat thing. listen to this. starts with a big picture. tectonic shifts and i love he used that term because i haven't seen it since spots and dots. tectonic shift in technology including ai, iot, automation, and clean energy. they are in every single mega trend. how can you sell this company? you don't know anything if you sell this stock. so i thought that gary, once again, delivered. he -- i happen to like lam more. i have been preferential because
9:37 am
i love novelis, but wow. great quarter. >> a little consumer weakness this morning, jim. dollar stores, el, scraping the bottom of the s&p list at the open. >> el, if you're selling el, my travel trust mistakenly owns it, i threw it in for david because he would criticize me, but estee lauder is, i think, the equivalent of rishe malt. they record a number that isn't great and then the stock is off to the races. estee lauder could do that when they report in august. people have to understand why ri richemont sells well in china. they don't build mansions there but you can buy the most expensive watch and show who you are. the new person running is, i happened to bump into an executive last week who had a gorgeous necklace on that i
9:38 am
wanted very much for my wife. i said, geez, that's beautiful. where did you get that? she said van cleef. i said, okay. >> sorry. >> you ever go to bulgari? they have $450,000 necklaces. that sets you back. >> industrials, jim, cat's leading the dow. freeport is up there today as well. then dupont. >> i love that. dupont, my travel trust had a big position because ed breen, not just because he was from the neighboring school district because that's not enough, but i think that the stock is incredibly cheap. by the way, they had great numbers, but the dupont quarter was incredible. if you think they're electronics, they have plastic for electronics. i think they're in the sweet spot. it's a total turnaround situation, and ed breen, this could be his big cap on his amazing career. so i like the dupont call very, very much. jeff marks today, who is my partner on my trust, said geez,
9:39 am
i want to buy more. but wow, dupont, great call to buy it. great call. >> speaking of upgrades, hood, double upgrade over b of a. >> had to. mostly crypto. and options, but they were fighting the trend. people like hood. i think a lot of the typical brokers are reluctant to embrace a company whose model really is still the gamified kind of things that people buy. but their numbers are really good since '23. >> i think back to your interview with vlad two, three years ago where you pressed him for something more, something that would teach discipline and patience and longer horizons. did you ever get that sph. >> they offer that draw, so to speak. i get their bulletins. but their customers are not there for that. their customers are busy buying gamestop this morning at 3:30 and 4:00 at a price of $30. has it hit $30 yet? >> you used to call them the
9:40 am
pajama traders. >> they're in denton's. they have feet pajamas, those people. $21. the feet pajamas. not just pajama traders. they have the feet. >> the footy pajamas. >> i like. my daughter's 30th, i remember when she was 29, 29 years ago, she was awearing the same pajamas. she had this thing, it's just between her ears. below her head. called a brain. you know, cranium. there's a lot of stuff. the medulla? what is that, the vegas nerve back there. i think those buyers ought to think about that. now, they may criticize me for saying that. i don't know why. it's just descriptive. >> there's a ton in airlines. we have an upgrade at united. a boeing annual meeting. the layoffs at spr. >> boeing annual meeting. imagine that. >> close to a ten-month high.
9:41 am
>> i think ual is so cheap, it's incredible. boeing was up three on the indictment. i guess on the conviction it would be up seven. >> the layoffs at spr, good discussion about what that would do to supply and the medium term here. >> you know, i have ap partner who does my forensic accounting. he said why are there no recalls of airbus? boeing used to be like airbus, but then boeing did this partners program where they gave away a lot of the businesses that weren't good. they extracted a lot of work from them, and i think that's one of the reasons why their plan to save money backfired and it's a root and brand situation. you have to rebuild the company. by the way, calhoun knew that when he was trying to get spirit together. the authorities have yet to be able to say the problem is you have to rebuild. you have to get all the fuselage back, and boeing is, again, a bit of a helpless child. a lot of people are saying how could you not buy it here?
9:42 am
because it's still a duopoly. my problem is that they haven't been able to fix it yet. and look, when they fix it, you'll know it. if they were buying spirit, spirit seems like it's falling apart. >> it is complex. supplier standpoint, supply chain, technology. you got highly regulated union. i mean, consumer facing. >> there's just -- they got a lot of problems. and yes, they can rally. if i were them, i would do a g gamestop like stock offering. i know that's offer, but geez, gamestop has that assassin's creed. they have the creed, the netflix, you know, they got -- they -- what is that? they have all the things on? twitch. ass assassin's creed twitch. >> you need a twitch show.
9:43 am
>> i'm told the twitch show, but at amazon, you can get the twitch version. >> we'll get you a big fat mic and you can do twitch for as long as you want. no going to break. >> look, redemption i understand my nephew, head writer, when i am late with my copy, he's playing the red dead redemption. >> the journals to says micrmi microsoft is going to put call of duty on subscription services. >> it was fought by the ftc. i'm not saying anything bad about the ftc. >> jim goldman has a note on tesla. we expect slower ev growth for the next few years as volumes meaningfully decelerated. >> obviously the new narrative is it's a tech company. >> you mean tesla? >> yeah. >> yes, they look at net future
9:44 am
purchase intention. it is worse for tesla than a lot of rivals. >> the numbers don't look good there. but that hasn't meant much. obviously, we have the referendum on the pay package. but no, tesla right now, it's a lull. but they'll come back and cathie wood or ron barron will say it really is -- it's the next, and they can say whatever they want, nvidia. by the way, remember, he turned on nvidia, musk. and then he had to go back hand and knees to get the nvidia chip inone of the few people who i think did not treat jen-hsun huang with the respect he deserved. >> interesting. jim, we mentioned the ten-year at the bottom of the screen. i was taken aback by b of a last night saying a decline to 3.25 on the ten-year in the next six to 12 smumonths is a good possibility. >> that would require the squeeze in copper to be
9:45 am
reversed. i don't know how they get that stuff. i don't. let's write that down. >> and play the tape back. >> and play the tape back. that's one, with the stock offerings that josh frost, his schedule that he's getting for treasury, what janet yellen is going to be selling and with the idea that service inflation is still bad, and we still have shelter is still bad. i don't know how they get to that. i just don't. god love them if they got to that, then the s&p is going -- we would have dow up 50,000 in a second. i don't know where you get that kind of thing. i mean, the s&p would be 5295. we would go to like 6295. >> at 6 for next year. not this year end, but yearent 2025. >> i don't mind that. by the way, take two is up five. people listen. maybe they realize there wasn't anything new.
9:46 am
please, when you ask strauss, say strauss, wasn't this kind of what you said could happen? like strauss, when i spoke to him yesterday, i said buy the pushback. he said, well, jim, the people who know -- he is so nice. >> he's been communicative. >> i think people are selling it this morning are people who just don't pay attention. >> jim, cannabis. doj looks like they're going to move to schedule 3. there is a lot of public comment. it could take a while. >> well, there's only one company that is real in that area. and that's the david klein run canopy growth, they have a real business model and they can get it done. it's up 116%, but canopy growth, which is, remember, really owned by constellation brands, and david klein was the cfo of constellation brands. they have a real business model and they're the winner if you want to play that. play the canopy growth. >> i think we'll talk to pure
9:47 am
leaf today. tilray also today. >> that's why you have to be in canopy. that's the real one. i like canopy. not the product. hey. you know -- >> the legal shift has taken longer than a lot of people expected. >> and everybody keeps thinking, well, when are they going to be able to accept more than cash at the dispensaries because this stuff should be bought in credit? you have to go to oregon to make it so like oregon has a stoner one and then next to that is one with walt whitman, and next to that is one that's kind of like rock star one. oregon is every other block. my daughter lived next to one that was called leafs of grass. that was the whitman. i said great. oh, whitman. i thought it was a bridge in philly. >> relatively flat market. dow up 18. obviously back below 40k. we'll watch bonds today. we actually get some fed speak on this friday.
9:48 am
waller, 10:15. daley, 12:15, along with leading indicators in about 15 minutes. stay with us. the future is not just going to happen. you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. the all new godaddy airo. put your business online in minutes with the power of ai.
9:49 am
9:50 am
9:51 am
let's look at some week today dow gainers, intel, 3m, laggards catching up. >> intel, still waiting. >> walmart in there as well with the best earnings reaction to yesterday or this week's print since 2018. >> doug mcmillon unsung, because he doesn't want to be known as a rspeon other than team. >> exactly. stop trading with jim coming up after a break. that's right craig. a team that's highly competent. i'm just here for the internets. at&t it's super-fast. reliable. you locked us out?! arrggghh! ahhhh! solution-oriented. [jenna screams] and most importantly... is the internet out?
9:52 am
don't worry, we have at&t internet back-up. the next level network. i sold a pillow! did i read this? did i get eggs? where are my keys?
9:53 am
memory and thinking issues keep piling up? it may be due to a buildup of amyloid plaques in the brain. visit morethannormalaging.com her uncle's unhappy. i'm sensing an underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their
9:54 am
“price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for. it's time for jim and stop trading. >> it's not a sleepy friday when matt boss from jpmorgan, releasing department stores and i think, the lot that catches your eyes bath and body works. there's a lot of things that he's got that i'm going to say are revelatory, macy's, some things, but it's tjx. i think tjx is one of his favorites. it's been a huge position for us for the travel trust because of
9:55 am
matt. top on trends margins fantastic. i think that the stock has been in a total holding pattern. it's done nothing for ages. and when i read this i just say you know what, i would like to buy more. we have a really good basis, but i just think if you read what they say it's fabulous. >> that's interesting. with more comment about that sector of retail or the consumer overall? >> right time right place. look, he's not going to push anything that is really, really expensive right there. when i say not expensive, i mean for the customer. tjx is the big winner when it comes to the companies doing badly and need to offload inventory and not promotional. nice thing about -- >> i have to say some of the inventory numbers this week out of retail were constructive. >> yes. we got -- things are good. i mean are they going to be dow 50,000 good? i just say things are good, and there are a lot of companies trying to reinvent themselves. if you go back over those companies there's 30, 40,000
9:56 am
those are visionaries that got us there. >> nice circularity. that's how you open the hour. >> because i just think sometimes when you look at ceos that matter so much more than we think they do and think everybody is hostage to a fed funds rate. these people say one thing we're not hostage to is a fed funds rate. i appreciate that. >> tonight? >> tonight i have a special doing everything als. bill nuti is a old friend and we'll show you how life can be reinvented and don't give up and bill, amazing executive, and we're going to speak to him and it's going to be -- i think it's going to be moving for people, but also constructive. >> jim, we look forward to it. heck of a week. >> yes. heck of a week. >> yes. >> exactly. >> really? >> i hope he knows. >> really? >> we'll get david back in a little bit. we'll see you tonight, "mad
9:57 am
money" 6:00 p.m. eastern time. when we come back, leading n'gonyerrs . . dot awhe. something amazing is happening here. students are inspired and engaged. that's because school districts consulted with cdw to design modern classroom solutions with preconfigured hp devices making education immersive, accessible and secure. now, when researchers study elephants, kids learn from 9000 miles away. make amazing happen. hp and cdw.
9:58 am
are you interested in safeguarding your investments with gold? alamos gold is a growing canadian gold producer with a long track record of outperformance. alamos gold. invest with us. our growth sets us apart. you know what's brilliant? boring. think about it. boring is the unsung catalyst for bold. what straps bold to a rocket and hurtles it into space?
9:59 am
boring does. boring makes vacations happen, early retirements possible, and startups start up. because it's smart, dependable, and steady. all words you want from your bank. for nearly 160 years, pnc bank has been brilliantly boring so you can be happily fulfilled... which is pretty un-boring if you think about it.
10:00 am
. good friday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with leslie picker, mike santoli here at post nine of the new york stock exchange. david and sara on assignment today after the peak above 40 k yesterday, stepping back a touch, but still in the green. 5230, vix at the lowest level since '23. >> despite big movers this friday morning. 30 minutes into the trading sgs but three ones that we are watching. another day of pain for the meme trade gamestop firmly in the red. those shares down 25% right now while amc turned somewhat positive, up about 2% there.
10:01 am
gamestop announcing plans to sell securities and reporting a sales decline. more on the fallout in just a moment. video game maker take 2 under pressure after disappointing guidance. the revenue was a beat. the company says it plans to release the latest version of flagship game "grand theft auto" in the fall of next year. take two's ceo strauss zelnick joins us on "money movers" next hour. take a look at shares of cannabis stocks. volatile after the doj unveiled a proposal to ease restrictions on marijuana by reclassifying the drug. we'll talk next steps with the ceo and founder of one multinational chain curaleaf later this hour. >> rick santelli has that for us >> hi, mike. indeed, april reading on economic leading indicators, coming into this number 25 of the last 26 months have been negative, now make that 26 out of the last 27.
10:02 am
minus 0.6%. the weakest or biggest negative month over month change since last year and put perspective on this, we've had two positive numbers, february of this year, and february of '22, in between, and after this past february, all negative. granted l.e.i. has historically long streaks of trending negative or positive, but this one, this one is a biggy. if we look at interest rates, right now we're hovering right below 4.40 in the 10. up 2 basis points on the 10, down 10 on the week. two years down 8 on the week and one of the forces in the equity markets the perspective of the fed still may haven't eased and the markets, interest rates not near 5% in 10s anymore. carl, back to you. >> rick, thank you so much. rick santelli. . milestone week for the market as you know by now. the dow did hit 40k for the
10:03 am
first time along intraday highs for the s&p and nasdaq. when it comes to the week ahead we're going to get a lot of retail earnings, macy's, target, tjx and nvidia front and center on top of a fed speak calendar into the weekend. mike, great chart out of barclays today looking at sort of catalysts that drive forward volatility and nvidia at the top. >> nvidia and the inflation numbers are the ones in terms of the known cat it lists for the market that get priced for some significant movement. so that's, you know, we got a few trading days until then. at the moment the market is kind of, obviously, digesting the round numbers, 5300 in the s&p, maybe 40,000 on the dow. i think the whole story the last couple of months has been, you know, extreme belief in the perfect soft landing scenario and the ai boom, giving way to a little bit of doubt as to whether we could absolve this move higher in rates and whether we can stay on the comfortable mid cycle or late expansion mode
10:04 am
and then a series of data that suggests we can. you know, rick mentioned that being near 5% on the 10-year treasury yield does seem to be a trip wire historically in terms of when yields work against stock. now well clear of that. i have noted, though, kind of a defensive thread of leadership in the last couple weeks. it's sort of registering that maybe the consumer momentum is waning a little bit and it's not necessarily a bad thing. it kind of gets reflected in the numbers as sort of a broadening out or sort of a more inclusive tight market, but you have to be mindful of the fact that we've rebuilt the valuations an we're going to start to look over bought and never got some real big kind of comprehensive flush at the lows. >> you wanted a bigger dip? >> to me it's about the tradeoff. if you forgo the real purge near the lows people didn't really bring down exposures that much so when the market comes back they don't have to chase it as much because they're in. so it's kind of like, you know, do you trade the smaller pullback for the less
10:05 am
aggressive, you know, follow through rally that we might be in for? we'll see. it's a bull market. you can usually find its way higher even if it looks expensive. >> like you have to eat your vegetables before you get dessert. >> a certain call vannism, you have to suffer for the gains. historically bull markets give you more than they take from you. not always symmetrical like that. >> a little more ice cream than you usually bargain for. >> that's right. >> to your point utilities have been on a run, third best performing sector year to date. >> although -- >> after communication services and info tech. >> still defensive is the debate? >> here's where i would view it. at the highs in march everyone was saying the momentum trade was so overheated, meaning that the best stocks of the prior three months were -- had massive out performance, that is unwound. what happens mechanically when that unwinds? people sell the high momentum stocks and buy the really left behind anti-momentum washed out stuff. nothing qualified for that
10:06 am
better than utilities. 12 months of outflows. everything else. it's defensive and then as it had an aggressive rally off the lows people decided it's a quasi a.i. play and long-term can participate there. it's mean reversion before anything else. >> even energy, goldman had the stat in the note yesterday saying of the s&p 500 earnings calls, 70% of executives mentioned ai this quarter up from 19% last year. >> going to 100. >> absolutely. >> over time. as we talk more about the breadth of the overall rally this week let's get to dom chu and under the radar names that have powered the market higher. >> to your point in the conversation just now about some of the kind of well covered names, the ones that we often talk about like nvidia because of earnings coming up, there have been other names in the s&p 500 that have on a year-to-date basis has been a generally very good year, up 11% and then just about over the last month since the lows that we saw in the
10:07 am
middle of april, we've had a pretty decent rally off is some of those pullback 5% correction lows for the s&p. on a year-to-date basis, among some of the names in the s&p, maybe not covered as much, that are sub-100 billion, not in the mega cap land, have done well, vistra, a company that does utilities, power generation, one of the bigger power generation companies, an ai play, a massive move higher. hel helmet aerospace up 53% and chipotle, yes a bigger name out there, sub-100 billion up on a year-to-date basis. keep an eye on those. as for the ones over the last month or so that have bounced back handily off the pullback lows we've seen, check out these names. it's interesting it's not all technology. check out what's happening overall with mether toledo, make of scales and measuring equipment, moderna on the health
10:08 am
care vaccine side of things up 26% and garrman up 20% as well. the broaden out are a theme. names not mega cap that are doing well. in some small way you can call it maybe a stock picker's market. i'll send things back over to you. >> thanks so much. dominic chu who has covered a lot of golf this morning. . our next guest thinks equities should perform better than bond given the sticky inflation. sandy palmroy is here. happy friday. >> happy friday to you. >> talk about that and have you been impressed with some of the calls about u.s. resilience in the back half, let's say? >> i think what's going to happen here is we're in the process of handing off the consumer economy to the industry economy, so we have under spend in our capital stock for decades at this stage, and now that the world is becoming sort of more multipolar, it's going to
10:09 am
necessitate a lot of investment, not only in our hard core infrastructure, you know, that we talked about and a lot of people have written about, but also as ai evolves, the grid, and, you know, generating more power, and just becoming more resilient from a defense standpoint. that's not just us. it's all the other countries in the world that have under spent relative to defense. i see this as being the u.s. consumer was about 70% of u.s. gdp. i think that's going to change over the next 20 years and it's going to become a smaller part of gdp but all this industrial activity likely to take place. that's how we're positioned in the fund and how i think this is going play out. >> i see center point and eaton to your point. >> exactly. >> where do you think that number goes where consumption is contribution? >> these things don't go, you know, up in a hockey stick. they tend to trend and then they, you know, flatten out or down trend again. maybe 60% u.s. consumer. >> meaningful decline in the
10:10 am
share of gdp. >> i think so. i think we're going through a big investment period here. >> we were on the desk when the dow hit 40 k yesterday and there was varying schools of thought about what it meant for the market from here. are you a believer that one should be chasing the rally at record highs and kind of where we're at, given that there's been sort of this mindset of going up and then kind of taking some -- crystallizing some of those gains even intraday? >> yeah. in my sort of world view at this stage, i think inflation is going to be stickier. i'm sort of in the jamie dimon camp and have been, we're going to stick inflation in the worst percent kind ofrange and equities in that environment are going to perform better than bonds. i think from that standpoint, equities are a better option. and this whole broadening out theme you guys are talking about i think is real as well. we've seen a lot of performance from the fantastic four at this
10:11 am
stage, definitely not seven anymore, and i think -- investors should be thinking about a little diversification here because even if you own the big stocks that are all beneficiaries of ai, i think owning things like a dividend fund gives you some sort of protection when you go into a more defensive phase, when you have the pullback that mike is talking about, and, you know, over the long haul, it's a tortoise and hair situation and i view this as the heir and we have to see ten years from now who is ahead and maybe my dividend stocks. >> i actually, onthat point, i note that you have eaton corp and emerson electric in the top ten of your fund which have been these kind of steady and high quality dividend growers, but it seems like they're acting like hares right now. they raced ahead, people, obviously, have given them a higher multiple. they had the crazy order growth that traditional industrial analysts maybe aren't used to seeing because of the power grid build out and other factors, so where does that leave you in
10:12 am
terms of feeling like the risk-reward is still good in those stocks in. >> we model all our companies on a dcf basis and run through different scenarios and given my world view of the industrialization trend continuing for some time, we think, you know, our upside view is very much in the case now, and we still think these have upside. more importantly for us, we think they can grow their dividends substantially. not only do you have this pretty healthy dividend yield, not tiny dividends, like dividends over 2%, but we think the dividend growth is likely to be 10 to 12% and going to way out pace inflation. comparing to bonds this looks more attractive to me. >> really quick does this mean that you minimize consumer-facing names, retail, staples, things like that? >> we own a few of those names, but i would say if you look, overall portfolio, we are much more heavily weighted to the more cyclical aspects whether it's industrials, materials, energy, so, yeah,that's where
10:13 am
we're more focused right now. >> pretty interesting inflection point, long term if that's where we are. good weekend. >> thank you. >> sandy palmroy. . as we lead to break our road map for the hour, a wild week for meme stocks with massive swings up and down, gamestop plunging again on news about its stockp with we'll take a closer look at what's next. >> pot stocks firing up after the government's plan to reclassify marijuana. we'll speak with one of the biggest players in the space about what it means for his company and the industry. >> and one of the world's biggest luxury homes out with earnings and shares are on the move. what the results are saying about the health of the high-end consumer when "squawk on the street" continues in a moment.
10:14 am
it's a beautiful... ...day to fly. wooooo!
10:15 am
10:16 am
. it's been a big week of action for meme stocks as gamestop slumps on fresh numbers and news on that company, kate rooney is tracking all the action joins us with the latest. kate, i was just looking at this ride that gamestop in particular has been on, where it opened on monday was like 26 and change and we're below that now. >> yeah. mike, what wild week. if you blinked you pretty much missed it. gamestop is essentially where it was trading last week. this morning, saying, though, it does plan to share -- sell additional shares in a lackluster preliminary showing a steep drop in sales for the first quarter. the video retailer saying it is
10:17 am
doing an at the market offering, plans to sell 45 million class a common stock and in a separate statement expects first quarter sales in the range of 872 to $892 million, down roughly 30% where sales were a year ago. takes the wind out what was a very wild week, guys, for gamestop on monday. up as much as 100%. this morning down double digits. as you said, basically exactly where it was trading a week ago before all of this kicked off again. same story for other meme stocks if you look at amc, these companies nowhere near the highs they hit three years ago in 2021. all of this action, if you missed it, sparked by a series of online posts by roaring kitty, keith gill led the band of online traders into meme stocks and gamestop three years ago. robinhood one of the other companies benefitting from all of this buzz. bank of america out with a double upgrade of robinhood this morning to buy from under perform and points to the rising
10:18 am
retail engagement this week and say that could drive more than 40% upside of consensus for robinhood. accelerating organic growth and part of leverage. getting a boost this week, guys. >> kate your study this closely, how quickly can rising retail engagement filter through to robinhood? it's surprising one week of moves is enough for them to totally change their conviction on the name? >> yeah. 40% upside was surprising, leslie, but the ceo tweeted out he also kind of got in on the on-line banter this week but tweeted out stats on tuesday, that said the equity trading volume about $5 billion. he said it was their biggest day in roughly a year. we are getting real es-time sta and had taken a back seat to crypto volume, for example. it's a big deal for them if equity volume does recover like this, but it's interesting that company has since the last meme
10:19 am
stock era, three years ago, it's accelerated into things like retirement accounts and credit cards and another thing analysts are pointing to. the meme stock action is absolutely a good thing for robinhood, but they've diversified and grown up since the last meme cycle. >> also a busy week on your beat between that be and affirm yesterday, that's our kate rooney. >> a big week for crypto, bitcoin up as bofa upgrades coinbase to neutral thanks to a macro environment they call a positive for the crypto market cap appreciation in trading demand. shares of coins have been on an outperformer on the year. that said shares of the stock have come off steep losses yesterday on the news that cme plans to launch their bitcoin trading. 40% of analysts call that stock a buy. >> after the break the chairman and co-founder of one of the biggest cannabis players in north america curaleaf as the doj looks to ease their restrictions on the drug. what pot stock investors need to know after this. don't go away.
10:20 am
[crowd chanting] they ignored your potential, dissed your achievements, and mocked your ambition. but it's not the critic who counts, and you know that. from the beginning, you couldn't be stopped. ♪♪ breaking resistance with every swing and block. ♪♪ your game plan never changed. ♪♪ so enjoy this moment. ♪♪ the one they said you'd never live to see. ♪♪ some would still call it luck. ♪♪ let them. because you know what it's always been. inevitable. ♪♪
10:21 am
♪♪ ameritrade is now part of schwab. bringing you an elevated experience, tailor-made for trader minds. 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.
10:22 am
10:23 am
. welcome back to "squawk on the street." pot stocks definitely in the spotlight today. doj has formally begun now the process of changing its stance on marijuana to a less dangerous substance schedule 3. the move would reclassify it as a legal status from schedule 1 and passes the ball to the dea which triggers a 60-day comment period and could take a few months to maybe a year. joining us this morning is curaleaf's co-founder and chairman boris jordan whom we have checked in on several times on this legal journey. how significant is this one in the chapters we've already seen? >> i think, carl, this is very important for the industry and a real milestone. 50 years ago the u.s. last reviewed cannabis rescheduling from schedule 1 to schedule 3 for political reasons didn't happen. the government seems to be taking a much more serious approach based on science and i think this decision to move forward is really important for
10:24 am
two reasons. the first is, that it will allow for research, very much needed medical research on this plant and the flavonoids in this plant to take place and government-funded research can happen under schedule 3. it relief leaves the industry from the tax burdening the industry very, very much over the last ten years. so these two things are very positive doefltsz that will come about on the back of this reschedule. >> right. that latter part, i remember a piece in politico a couple months ago about the federal tax code, which at this point prohibits a lot of companies in the space from, say, writing off business expenses makes it more difficult to turn a profit. we would see that ostensibly in the bottom line? >> yes. so the real effect of this is that basically the industry pays approximately a 70 to 75% tax.
10:25 am
if i can summarize it that way. versus other companies in the united states that pay a 21 to 22% tax. it has been a very, very profound effect on the industry. procurely just to put things into perspective, rescinding this tax will contribute 150 to $200 million day one to the bottom line of the business on this year's projected revenues. >> wow. that's a remarkable figure there. and those taxations is also part of the contribution to a black market as well, right? and so if this rescheduling decision does go through ultimately -- there's a comment period and other things that need to take place -- what would that do for the black market? would it be a boon to you to see the black market business go back into the legal sector? >> i think it would help our industry very much, but i also think it helps the safety for the industry, right. consumers today are buying black
10:26 am
market products because they're cheaper due to this capricious tax that we pay. we will be able to bring down prices forcing consumers to go to the regulated market where products are safe and tested and i think this is the most important thing. consumer will be better off, safer at a better price with this tax being relieved. social equity licenses and small entrepreneurs that can't operate basically in this industry due to this tax, will also be able to prosper and that's really important for the industry. >> boris, assuming that is, you know, the rules of the road going ahead, how do you see the industry developing in terms of how fully penetrated it is between black market and legal product and are you just now talking about trying to grab market share among what's out there in the business and trying to figure this out for a while? >> the u.s. industry is estimated to be approximately 100 plus billion dollars. the legal industry is around $30
10:27 am
billion. so you have $70 billion in the illicit market today that will most likely start to move much quicker into the legal regulated market and, therefore, ending regulating much more strength to operate and much better financial help which will then lead to consolidation in the industry but also lead to a lot more entrepreneurship in the industry, which will allow new businesses, craft growers and craft companies, to start to develop because they'll be able to write off their expenses and not have to pay the exorbitant high taxes. >> final, boris, does it change existing narratives where growth was going to come from in the industry, be international or state by state? how does it adjust that playbook? >> well, it basically will allow to happen is it will allow more competitive pricing to compete with the black market and that is going to have tremendous growth potential. it will -- the industry -- in our opinion, we expect there to
10:28 am
be a letter from the doj on the back of this rescheduling, whether it happens as you said, 6 months, 3 months or a year, that let are will likely say the industry for the next five years will likely be regulated as it is now, state by state, so the inner commerce within the country isn't going to change. until the reisearch done and ne rules written. the industry will continue to be governed the same way it is today however it will become substantially larger because of its growth potential because we will be able to be able to compete with the black market which is winning today very much so because of this tax. >> all right. good guidance and helps the viewer understand what's, obviously, a complicated and a long journey, as we said, for the industry. thanks, as always, good to see you again. >> thank you very much, carl. >> still to come, tech hitting new highs. the best performer this month and one of the top performing sectors on the year. we'll talk top picks with one
10:29 am
long-time investor in the space who says the broader tech rally is just getting started. stay with us. t name, a great lo, and a beautiful website. just start with a domain, a few clicks, and you're in business. make now the future at godaddy.com/airo
10:30 am
10:31 am
10:32 am
welcome back. i'm contessa brewer. trucks began delivering humanitarian supplies to gaza today using a temporary pier constructed by the united states. this floating dock is part of an effort to address the famine situation in the enclave. houston officials say four people died yesterday in severe storms that brought hurricane-force winds. in fact, that bad weather pummelled the downtown area. windows blew out and power lines toppled and cars were damaged. officials say nearly a million people still don't have power. . world's number one golfer scottie scheffler teed off in the pga championship hours after his arrest allegedly for assaulting an officer. jail records show scheffler was booked on a felony with criminal mischief and reckless driver. scheffler called it a big misunderstanding and his attorney says at no point did he
10:33 am
assault any officer with his vehicle. it happened as tlefs an enhanced police presence around a louisville club after a pedestrian killed in an accident earlier this morning. look for more details there. >> thank you very much. . tech trading at a new 52-week high up 40% in the past year. it is the best performing sector this month, second best so far this year. we wanted to dig into two recent under performers. tesla the only mag 7 name down on a month-to-date basis and in bear territory. apple turning around, it's up about 12% this morning and almost back in positive territory for the year. deepwater asset manager gene monster joining us. if we want to unify apple and tesla longer term laggards it might be they don't feel directly leveraged to the current phase of the ai boom. how would you treat each one? >> i think that both will have a profound impact from ai, and if
10:34 am
we start with tesla this, of course, is not a growth period for the company. the deliveries this year are going to be down slightly from last year. it's just a remarkable revelation related to the slowdownin the business, but i do believe that fsd is a massive opportunity powered by ai. if you look at what they've achieved on fsd over the past three months it has been remarkable. the acceleration in miles driven that grew 73% in the march quarter, that compares to a 56% growth in the september quarter, and 64% in june, so we see an acceleration of autonomous miles driven off of a higher base, that is an indication that something is happening. that, of course, is driven by ai. when it comes to apple this piece is a little bit more of a windy road when it comes to ai, and i think what we learned this week relative to openai and
10:35 am
google was remarkable. especially openai and what they showed with their multimodal real-time demos and i think that that really underscores the importance for apple to partner initially around ai. i think that that will be a welcome change to the products, but in general, i think that the first chapter call it the first year of apple and ai, is going to be a partnership approach to really enable this generative and multimodal features across the product line. i think they're both going to benefit but at different degrees. >> more broadly, gene, you know, i was talking about this yesterday, if you looked at the kinds of companies participating in ai in one way or another it has been the build out of the infrastructure that has been obvious. we'll get nvidia's next week and you have implementers like meta or others much more tangibly deploying various kinds of ai and then every other company
10:36 am
that says they have an ai strategy and going to fuel productivity and you don't really see much effect. so i guess how would you think it stages from here? >> well, i think -- market level talk about a couple companies at the highest level the way this stages out is that we're in the early stages of what is a three to five-year bull market and that may seem out of touch given the market run we've had more recently, the run more recently has been part ai driven, part interest rate driven but if you ultimately believe in the substance of ai is going to be greater than the hype the market is going to continue. i think the broader tech trade is going to continue to do well. this is going to end in a spectacular bursting of a bubble and -- but i think there's a lot of wealth creation that can happen between now and then. but as far as some specifics i want to highlight a couple, just one dynamic amongst i think some of the bigger ai companies and specifically related to meta and
10:37 am
google. these are part of our flagship titan product but those two companies are unique because their ai future is not dependent on someone else. they both have their own models, llama, of course, and with google it's gemini, but microsoft, apple, what amazon is doing, all those are requiring third-party models to really power what they're doing. i think that's one dynamic. when i think about really cutting to who are going to be some of the biggest winners in ai specifically it comes down to meta and google. >> to follow up on what you said regarding a three-to five-year bull market that will end in a bubble bust are. you can't help but think back to the '99, early 2000s there. >> sure. >> this time do you see the bubble being driven by the large caps, driven by, you know, some of the mag 7 names that have exposure here? if so, does that provide any protection against a bubble bust like we kind of think about from
10:38 am
25 years ago? >> so i think mathematically the substantial of the bubble will come from a different class of tech companies that are going to power this higher. part of it is going to be an ipo class of ai first companies, and we've got the obvious ones. there's going to be less obvious 100 like hey gen and questions what happens with xai in this whole equation, but i think of companies in the mag seven that continue to be well positioned and will benefit, but that's not where you're going to get this 2 to 3 x appreciation. i'm sensitive to the comments i'm making. i was an analyst, and i saw all the euphoria around what happened in 1999 and all the pain after that, and so in this case, what we are seeing and ultimately is the concept of a machine to be able to function with general intelligence to me is a 2x bigger factor than what
10:39 am
internet is. i think that's going to come from the smaller, middle cap and some ipos that ultimately will be the new mag seven call it five years from now. >> it will be interesting to track whether, you know, the example from the prior period of thinking we'll never have enough fine capacity and broadband in the ground, to all those companies going bust, now we feel like you can't make enough of the computing capacity. we'll see how it goes. thanks for the time this morning. >> thank you. >> turning to retail and fresh clues about the health of the high-end consumer with results from one of the biggest luxury names. robert frank with the story? hey robert. >> reporter: good morning. good to see you. risch month doing better than expected sales down 1% in the quarter so investors expecting worse. two upside surprises here. the first jewelry up 6%. now most of richemont's profits come from cart er and vancleat. jewelry up 3%.
10:40 am
that was better than lvmh's division that includes tiffany and bulgerry. the other news the appointment of a company wide ceo. nicolas boss ran vancleat will oversee all the brands and report to johan rupert. rupert saying he's not stepping back, but wanted to delegate more of his direct reports. the news from china, though, continues to disappoint. sales in asia ex-japan falling 12%. rupert saying, quote, the chinese will recover. i however, think there was a drop in confidence and in the social contract because of the scars left by the lockdowns of covid. weakness in china was offset by the strength in the u.s. sales in the u.s. up 12%. europe was up 7%. guys, really mixed bag here. mixed shopping bag when it comes to luxury. burberry down 40% yesterday, 40% decline in profits and then
10:41 am
caring with a profit warning in march because of the problems at gucci. it's really company specific and even brand specific right now, but broadly, luxury is slowing to the sort of low single digits from the double dim -- digits a couple years ago. >> lvmh has cautious comments last month as well. it's interesting when you put it alongside the fact that trillions in stock market wealth have been added in just the last six months i'm wondering what the current evacuation is for figuring out when this area might pick up again, unless it's just a china question? >> yeah. it's a really interesting paradox because the assumption is that luxury sector is driven by a wealthy consumer, and as we're learning, so much of the luxury brands are supported by aspirational consumers that don't have a large exposure to the stock market and aren't feeling that wealth effect, so where you're seeing the biggest declines in the luxury space,
10:42 am
are these aspirational brands that have a broader consumer base and aren't just catering to the wealthy, but the sort of merely affluent or hoping to be affluent that spurnlg splurge occasionally for products. that's the sector hardest hit. >> appreciate that. really interesting week taking shape on the luxury front. still to come the latest read on housing as the 30-year fixed holds above 7 and, of course, demand remains weak. what's the fed's next move on that front? we'll talk about it when we're back in 2.
10:43 am
when it comes to investing, we live in uncertain times. some assets can evaporate at the click of a button. others can deflate with a single policy change. savvy investors know that gold has stood the test of time as a reliable real asset. so how do you invest in gold? sandstorm gold royalties is a publicly traded company offering a diversified portfolio of mining royalties in one simple investment. learn more about a brighter way to invest in gold at sandstormgold.com.
10:44 am
[ growl ] ready for the road trip. learn more about a brighter way everyone comfortable. yep, there's plenty of space. i've even got an extra seat. wait! no, no, no, no, no. [ gasps ] [ indistinct chatter ] [ sigh ] let's just wait them out. the volkswagen atlas with three rows of seating for seven. everyone wants a ride. [ snoring ] ok, get in. [ speaking minionese ] yippee! and see "despicable me 4" in theaters july 3rd. rated pg.
10:45 am
housing inflation has been a bit of a puzzle because current rents have been low, current rent increases have been low for some time, but they're not showing up, that's not showing up in rollover leases and in owners equivalent rent. >> you could make the case that there's some activity on the mortgage side in january because mortgage rates came down. i think that's true.
10:46 am
i don't think that's what's driving house prices. >> a number of fed heads weighing in on the housing market this week as inflation continues to bite. in addition to chair powell and president barkin, atlanta fed president raphael bostic saying despite some progress on overall inflation, housing affordability is still a major concern. the latest read on consumer prices this week showed shelter costs still persistent, rising for a third straight month. so what's next for the property market? joining us is housing wire's logan. thank you for being here, logan. really appreciate it. so does the housing market need to see some significant cracks in the labor market for affordability to come down? is one purely necessary for the other? or is there a way to bring down housing affordability, as we've seen some disinflation in other areas of the economy, without labor really starting to crack? >> well, the only time we really
10:47 am
had disinflation or deflation in housing was in like 2010 for a few months, so when people lose their jobs, they can't rent, so if you're looking for deflation, then a job loss recession can give that to you. if you're looking for disinflation, you have to build as many apartments as possible to pull down the growth rate of rent inflation. it's rare in america to have rent inflation go negative. so as time goes on, more supply comes on the market, wage growth slowing down. i think wage growth slowing down would benefit rent inflation. you put those things together, wage growth cooling down and more supply, you should get the growth rate of rents to cool enough for where the fed will be a little bit more comfortable. >> when do you expect that to happen? i feel like it's something we've been talking about for a while? is it within the next year or is it further out from that? >> right now the labor market is softening, and with a softening labor market, with job openings coming lower, the quits ratios
10:48 am
coming down, the growthrate of wage growth should be slowing down. when you get more supply of apartments coming on, single family rents is a different story, then the growth rate of rent inflation will cool down. the fed should be happy about that. in regards to home prices, first part of the year is going to show a little stronger data because the year over year com rps low, but the second half of the year the growth rate of home prices should decelerate. our weekly tracker inventory showing healthy growth and price cut percentage slowly rising higher. the second half of the year should be more beneficial for the federal reserve members. >> yeah. it's interesting, logan, try to track the lags here because i'm starting to see concern about, you know, new multifamily housing starts have come down a lot and you had this lag response to the rise in interest rates. i just wonder, you know, if you're looking out a couple years whether, in fact, we're ever going to get free of this
10:49 am
extreme tight supply and high prices? >> fortunately, the permits are at the covid recession lows and keep continuing they will be at the lows of the great recession. the five unit we have to build as many as we can or complete them. it takes 21 months to complete those projects. two years down the line we'll be stuck with a lack of supply in that category. single family rents are holding up. single family rents dual household nyse is gncomes will more difficult to cool down. five year e permits are at covid lows. i don't think we can catch up fast enough with the apartment market. lopely single family rents start to cool down when wage growths cools down as the fed has kept rates higher for longer and implications for the future production of housing when that happens. >> mean while, you have the "journal" with a piece about
10:50 am
home prices starting to cool in florida and texas. i think the line there we're moving into a buyer's market. i'm seeing, logan a lot of charts of harmonized pce, where you strip out oer and basically running at target without rent. i wonder how helpful you think the inflationary metrics, pce or cpi, so i think that's a whole different conversation. what we know from our weekly tracker data is that new listings data is growing year over year. active listings is growing year over year. florida and texas is about 40% of all the growth and inventory this year. with all that said, we're still near all-time lows in active inventory and new listings data. the growth data pricing should cool down. a lot of data lines we get that people see the reports are kind of lagging. we're starting to see price cut percentages move up. that's a positive for the housing market. hopefully we see the deceleration in the last six months of the year and we get
10:51 am
some stability for wages to go up. at some point mortgage rates will come down, just getting down to 6% can boost demand up a little bit. we're the third calendar year of lowest home sales. we have good demographics. so, it really depends on how much inventory growth we could have to where we're comfortable. i would be much more comfortable with the housing market if everything is back to 2019 inventory levels. we're not quite there yet. a few cities in the country are. i think those are the more healthy inventory balance parts of our country right now in terms of the home price growth cooling down in a positive way. >> yeah. it's certainly all relative. really appreciate your perspective today. thank you, logan. appreciate it. meantime, voting officially closed as mercedes workers in alabama decide whether to join the uaw. important vote for union-free south. we'll talk about that after the break. next on "money movers," the ceo of take-two breaking down the fresh numbers there, the news
10:52 am
about gta6. that starts at the top of the n'gowa dot ay.
10:53 am
a slow network is no network for business. that's why more choose comcast business. and now, we're introducing ultimate speed for business —our fastest plans yet. we're up to 12 times faster than verizon, at&t, and t-mobile.
10:54 am
and existing customers could even get up to triple the speeds... at no additional cost. it's ultimate speed for ultimate business. don't miss out on our fastest speed plans yet! switch to comcast business and get started for $49.99 a month. plus, ask how to get up to an $800 prepaid card. call today! welcome back to "squawk on
10:55 am
the street." voting has ended for mercedes workers in alabama. let's get to phil lebeau. >> we wait to count the votes. we except results between noon and 1:00 eastern time. might be a little later depending on how long it takes for the vote count to take place. when you look at what's at stake for mercedes, there's a lot at stake. the two plants that are voting have about 51,000 employees at these two plants in northeast alabama. the worker pay there averages between $23 and $34 an hour. the expectation is that if the uaw organizes these plants, that could go up another $5 to $7 an hour depending on the position and the contract that is worked out. for the uaw, this is a chance to reverse the decadeslong trend of losing membership as auto plants were downsizing for the big three over the last 40 or 50 years. 370,000 members right now. that's going to tick a little higher since they won the vote at vw last month in tennessee.
10:56 am
i'm going to show you toyota and hyundai shares. the reason we're showing you this, there are two plants some suggested the uaw will next target. a hyundai plant in alabama, a toyota plant in missouri. that's not confirmed. they may not target those two plants. those are two that have been mentioned as possibilities after this. again, we should hear from the nlrb some time in the next few hours. >> is there any way to handicap on the mercedes vote as to whether people think this is a likely pass? >> i think it probably passes based on the people that i've talked with. but this is not a slam dunk like it was with volkswagen. volkswagen, you had 74% of the people saying, we want to vote. you know you're going to pass if 74% are demanding a vote. it's not that level of demand at mercedes. but they've got a lot of momentum down there. i wouldn't be surprised if the uaw wins this vote. >> really quick, phil, if they -- well, regardless of the
10:57 am
outcome, which automaker would they be moving onto next? >> either toyota or hyundai. those are the two mentioned the most. >> it's obviously been -- you got sean feign on the time 100 and a lot of attention paid to the union push in the south. geouonebeau. hu hr "money movers" begins after the break. [busy hospital background sounds] this healthcare network uses crowdstrike to defend against cyber attacks and protect patient information. but what if they didn't? [ominous background sounds] this is what it feels like when cyber criminals breach your network.
10:58 am
don't risk the health of your business. crowdstrike. we stop breaches.
10:59 am
11:00 am
good morning. welcome to "money movers." morgan stanley's chief u.s. economist ellen zentner is here. she's calling for three fed cuts this year with a start in september. she got it right already, saying back in december, expectations with a march cut were overdone. then the ceo of take-two as the company cut its booking forecast and lily anticipated launch of grand auto theft vi for 2025. robinhood gets this double upgrade at b of a. why the firm says now is the time to buy as we are 5300 once again on the nose. dow about 90 points shy of 40k. so much attention yesterday to that round number. and th

67 Views

info Stream Only

Uploaded by TV Archive on