moving to denver after major league baseball pulled it from atlanta after the voting law it's tuesday, april 6th, 2021. "squawk box" begins right now. ♪ colorado ♪ ♪ rocky mountain high ♪ ♪ i'll seen it ♪ ♪ raining fire in the sky ♪ ♪ shadows ♪ welcome to "squawk box" here on cnbc. i'm andrew sorkin along with joe kernen becky is off today it's just the boys this morning. >> just the two of us. >> nice to see you, joe. >> we'll have songs probably duet-type things. >> lots of duets we'll try to keep the tune i'll try to keep the tune. i'm not very he good at that

look at futures right now. setting up after a pretty fascinating day yesterday. dow looks like it will open off 34 points. nasdaq off 34 points as well, as it happens s&p 500 looking to open down about 8 points the ten-year yield right now. we are at 1.704. it is time for the "squawk stack. joe, do you have any new pancakes you want to throw into the list this morning? the credit uisse, of course, i the big one. we will talk about that one in just a moment. bitcoin at 58,000. ether. we have been talking about ether yesterday. where are you on ether >> i'm clueless on ether someone asked me about the "squawk stack" and what should

go into it my only response did you see it >> it's tuesday. >> is today tuesday? i was focusing on -- that was too much thinking for me to figure out yesterday, i was not on. that means yesterday was monday. that was focusing on that. i'll get it straight which day it is and worry about that i understand that there has been some talk about ether. i was trying to get through to read the yuan piece in the jou journal. i'll read it again is that an endorsement of cryptocurrency if yellen and powell are still living in the dark ages, basically on cryptocurrency, are they the two right people to take the united states into the future when china could -- they look to ready to go full on.

they will leave us in the dust >> if i understood what the digital yuan was there are other people who think and i have to ask this question. you will hear me say what happens if we create a digital dollar then they say no, no, no actually we could have a stable coin that matches the dollar then i have to admit that is when i get confused. >> and to add on when robert mondale died in 1988 his idea was a global paper standard that included all currencies money is so hard to understand in the first place, andrew >> we'll have a global currency

and tax system at the rate things are going. >> global tax system >> minimum tax. >> they are going like, yes, it's all happening no border. all globalism. moving at pace just like he wanted. >> i don't think that global tax is going to move anywhere fast we could discuss that in a little bit also this morning, the fallout from the archegos capital saga it continues credit suisse executives this was a possibility yesterday. the investment bank and chief risk compliance officer saying good-bye the lender reported a $4.7 billion hit from the meltdown of the archegos capital it suspends the buyback program and slashing bonus

the bank's outgoing chairman is giving up part of his pay. funds connected to the insolvent finance company. now some of the damage was offset by the strong quarter bank projects pre-tax losses of $960 million if you work at credit suisse and you thought you were going to get a bonus and everything in your island of the world is going okay and for this to happen not a good day >> the 4.7 is the number that focus your eyes out. >> yup >> in a speech here, we talked about janet yellen through the administration support behind the international effort to create a global minimum tax for corporations they have to pay a minimum

regardless of where headquarters are located. it prevents a race to the bottom where countries cut tax rates to entice companies to move across the border democrats in congress released a proposal to raise taxes on profits that large companies earn overseas. we will talk about this with one of president trump's tax cuts. congress member kevin brady. he will join us as 8:00 a.m. eastern. >> we will get together. it is cartel building. the thing i don't understand is if you are a country that may not be, you know -- today, there are countries today that might agree to this. it this a brexit situation to be competitive, i want lower taxes to bring business there.

it just changes the dynamics you know me. i appreciate the race to the bottom issue more than anybody in concept, i like it, i have to say. i don't understand how it works in practice. >> i don't know how to talk about it there's -- look, we have seen cartels in the past. people cheat they don't stay in cartels they cheat an inclination to somehow massage it so it is still better to bring your headquarters here than somewhere else. i just don't see everyone staying on the same page >> look, a lot of things are happening that i never thought would happen. >> you think states in america could agree to something like this >> we have enough trouble there, don't we >> bingo >> someone told me they think florida will have 200 electors

soon >> given the amount of people rushing down there sdp. >> this is something to behold i woke up to this. it hit both teams. in sports news baylor won the first ncaa tournament championship. knocking off undefeated gonzaga. 86-70. bears dominated the zags forcing turnovers. they built a big lead in the first half that never came closer than nine points for the rest of the game uca ucla is really good. now gonzaga? i don't know you never know. >> we didn't talk about it yesterday. that shot. >> yeah. against ucla. >> that was beyond >> ucla. they were so close

if ucla -- ucla had to play the way in an 11 seed you can't tell it's impossible to figure out. i've decided andrew, they gave me 4.5 points to take gonzaga then, the real spread was zags giving them 4.5. i took that. then i said why are they doing that i took baylor. i had both teams getting 4.5 if it had been a close game by one or two points, i would have won both instead, i don't know. i broke even i don't know it doesn't matter. $3 i can say i had baylor

i also had gonzaga. >> say it loud and proud let's tell you about whati going on the georgia story here for days now. sources now telling espn that major league baseball plan to relocate the all-star game to coors field in denver after pulling it from atlanta over the new voting law the announcement expected today. the move sparking a backlash the governor slamming the move senator mitch mcconnell had strong words for ceos. >> i found it discouraging to find corporate ceos getting in the middle of politics my advice is stay out of politics don't pick sides in these big fights >> texas governor greg abbott backed out of throwing the first pitch at texas rangers home opener yesterday said the state would not seek to

host any special mlb events, joe. it has been a wild story to see the flip what i have seen is the flip flop between the relationship with the republicans and business community and democrats. all of a sudden, progressive democrats are saying this is great. we love your business. all of this power you now have, fabulous these republicans are saying, you know, citizens united. we want to give you power and use your money and influence stay out of politics >> i have gone back and forth with one of our friends about it i said, the ceos -- last week, these were the greedy parasitic stock buyback pan your wallet low lives were you talking about. now you are holding them up as the model for the rest of us are supposed to think.

are they greedy parasites or model citizens we all do this when someone is thinking the way with we think. we talk about it >> the truth is it's both. >> right andrew, they've got customers that run the entire political spectrum the lowest common denominator is the path they try to walk at all times. almost a canary in the coal mine for all social issues. i quote that dylan song. you don't need to be the weather man to know which way the wind is blowing i can feel it. you better have some thick skin and be ready for the consequences i'm glad we have a business network. although this does go on business the social issues are getting more complex can we talk about bitcoin?

i saw this with you. i said, wow. i've been vaccinated everything else. i'll get quadruple vaccinated. i still don't know if i'm going to a place of 40,000 people shoulder to shoulder >> let's show people >> speaking of it. this story has everything for you, andrew. everything the atlanta story. the all-star story it's got the culture it's got the masks it's got the pandemic. it's got it all. encompasses all of your bullet points 40,000 people at the rangers home opener. fans packed the ballpark yesterday. first major pro sports event to app approach capacity in more than a year all tickets were for sale. the park was three quarters full at first pitch most people had masks on and they tried to get people to wear

the masks. not everybody had masks on we got to get used to it again, i guess. i would have felt -- i don't want to admit it would you have been okay there i have been vaccinated and we have been conditioned to be very crowd-ophobic. i don't know when that goes away it's sad. >> i would have add my n-95. >> double or triple and trying to maintain distance i don't understand you would have set foot. it was outside >> the outside i'm good outside i go to outdoor restaurants now. we're getting closer >> maybe we can as we get -- there are places they think by the end of may could hit close to herd immunity maybe we need to be less phobic. i don't think about it if i think about it, maybe i would have gone in there

just the feeling i get when someone is in my bubble. i'm not ready. coming up, reopening -- no one wants to get in my bubble. they're avoiding me. reopening stocks continue to surge higher on expectations that the economy is set to open. we look at the big gainers next. as we head to break. check out the price of crude we're right back ♪ cause 2 out of 3 ♪ ♪ ain't bad ♪ >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. ♪ ♪

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welcome back to "squawk." the contract manufacturer catalent will double the output of the covid vaccine it will produce 400 vials per minute joe, so much of this is raising questions over what the u.s. should do with the stockpile given that it appears within the next month or two, we may have

extra. should we send to mexico or canada or across the world do we give it back to pfizer and moderna and say you do it and resell it and give us the next version with the updated vaccines that may address variants in the fall fascinating questions taking place right now about all of this >> we got enough and plenty to send, we have to send. this is where i do become a globalist. you read about the biggest risks is that if we don't make it a global effort to eradicate it, there are places where the variants emerge and we could get a bad variant. not just more contagious, but virulent that is why we have to eradicate it in our backyard and all around the world >> questions of how we send it you can give it back to the drug

companies and they give it to at a profit we could give it to free to developing companies will we have enough if we all need a third booster it is a very complicated issue we should talk to dr. scott gottlieb about this. we don't have the right answer from this. >> once we have enough, we should do it. >> we have to do it. the question is how do you do it what are the mechanics >> the big day for dow and s&p american airlines up 54% this year carnival up 30%. cruises? wow. darden restaurants up 21%. and joining us on airline stocks is the senior research ainnalyst and ker ry firestone

you do other things as well. we can talk reopening with you where is the value >> what we're seeing across the board is that people want p to travel there's a huge jailbreak going on and we are seeing strong spring break traffic better than we expected. we are also seeing very good forward bookings we are seeing bookings for the summer months start to pick up and the booking curve lengthening which we view fa favorably. we think the quarter will start off better than we originally thought and go through the summer months at least through

labor day being fairly strong. >> numbers that we talked about in terms of the moves we have seen, there's more left? if you are not in yet, wait until they pull back >> this is scary, joe, because these stocks are back to pre-pandemic levels and earnings are not. we are careful about where we put new money. they anticipating 2023 earnings. we don't have the industry profitable until that year low cost airlines spirit is one of the top airlines. if you think international will come back, i heard your last discussion with andrew about the vaccine and not getting around the world and so on. if international doesn't come back until 2022, these stocks

will probably pause for a while before they have another leg up. >> right until the fundamentals grow to where the multiples are right now. kerry, you have good nuggets in there that maybe haven't moved yet or would you wait and maybe be more opportunistic in the future >> we have been talking reopening since june this is not a new story. to buy an airline stock, southwest, is a good company, but close to the all-time high as helane said i covered airlines a long time ago. what we own on the transportation side is bookings and tech booking, priceline.com, and three legs of the momentum domestic travel which started already. international travel will be as we get more people vaccinated.

then, eventually, we will have a business travel with convention and conference comes back. there are several years of booking momentum that we think will help that stock lob tech a freight train and car producing company has been among the bottom as you expect we have a strong economy there will be more great loadings and buyings are up. supply chain will smooth out the stimulus package with the infrastructure on the transit side, people will come back to public transportation eventually. several years where you have strong earnings comparison that is a good way to play reopening. again, many of these stocks. airlines, casinos, hotels have had an enormous move to get them higher, you need to have multiple expansion. this market is up 8% from the

bottom we are talking cyclical stocks you have to be discerning when you talk about new money sdpmoney. >> for hotels, depending on international, it seems like you might be a year later than domestic >> again, yeah if you look at what has happened with the stocks recently, a surge from november when we got positive news on vaccines until about three or four weeks ago. then several of them have come down 10% to 20%. marriott or marriott vacation. both companies have paused lately you have seen a bit of a skepticism on the part of investors of how much to pay yesterday was a big move for the reopening stocks they have come down. we are seeing the market broadening you saw last week the big tech

names pick up pace they've been weak since september. they under performed in the last few weeks, starting to see investor interest apple, alphabet and even amazon yesterday. facebook has been strong the market is running away from just cyclical value and reopening which is the only way it can continue to move higher >> helane, is air freight or aircraft leasing cheaper or opportunities there in the rest of the universe? >> so, we like fedex still we think there is room to go to the up side there. we don't think people will stop ordering online. aircraft leasing there are two publicly traded companies left air lease and air cap. air cap is in the middle of doing the huge acquisition of ge capital.

we think as you look ahead in the next two years, the three stocks make sense. maybe more so than the airlines because as i know kari just mentioned that stocks pre-pandemic highs or close to it it just doesn't make sense with the multiple extension >> very good helane becker and kari firestone. thank you, both. >> thank you it's tuesday andrew it's tuesday >> it is tuesday, joe. it is tuesday. if it is tuesday, we are talking taxing because it is tuesday we talk taxes every day. you ready for this wealthy new yorkers may soon pay the highest tax rate in the country. who else is going to be here but robert frank to bring that special report next. and former disney ceo michael eisner is talking streamining the media

landscape. "squawk" returns after this. >> announcer: what'sworking is sponsored by comcast business. bounce forward at comcastbusiness.com. seismic or small, it continues. change is all around us. shaped by technology and human ingenuity, we can make it work for you and your business.

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from a resume data base claim your seventy-five-dollar credit when you post your first job at indeed.com/promo welcome back wealthy new yorkers may soon get the highest local tax rate in the nation robert frank has a look at what is reportedly under consideration. robert, what is happening here >> what is happening is new york state lawmakers and governor cuomo reached a deal to corporate taxes of $4.3 billion a year that is the added revenue.

the top income tax rate from 9.65% of more than $1 million a year those $5 million a year are taxed at 10.3% a year. the combined city and state taxes are 14.8% for the top earners in new york. that tops california's 14.3% as you mentioned, the highest in the country. if biden's plan for the higher federal tax rates are approved the combined rates for the highest earning new yorkers is 54.4%. new york receiving the $12.6 billion from the federal stimulus and income tax revenue has been higher than projected those higher than projected revenues are coming from high earners. andrew, the big question around all of this is because this

appears to have been approved by the governor and the legislature is when this passes, what happens to those wealthy new yorkers? how many who left will come back and how many will say i'm not coming back? >> a couple of questions is this -- this is a marginal tax situation? i ask because i see the $1 million bracket and the $5 million bracket and the $10 million bracket, et cetera, right? >> that's right. it is every dollar you own over $1 million and every dollar you own over $5 million. starting at $1 million, it effects the top 1% of new york state at city taxpayers. they pay 40% of the income taxes in new york state. this is a group that is very important and very sensitive to tax changes. >> what is the average i don't know if you know this. what is the average income in new york city?

>> in new york city. it's actually -- i don't know exactly what it is whenever you look at the new york city, because you include the boroughs the incomes are not that much higher than the national 15% to 20% higher. as we know, it is a very unequal city a lot of -- the largest number of high earners in the country and a vast group of low earners. again, that's the whole safety net of new york city high earners funding lower earners in the system. >> are they all going to get on an airplane? this is migy great fear 10 or 20 years ago, people were not mobile the way they are today. it is going to be fascinating to see what happens. >> even a year ago, andrew >> right all true robert frank, good to see you. thank you for breaking this news down to us

joe? >> you are worried you won't get a seat on the crowded plane as you are leaving? what did you mean? >> what are you talking about? i'm worried that my plane is in line on the tarmac and a lot of them taking off at the same time >> we have learned we can do this show remotely we learned >> teterboro airport has one runway that's the thing ♪ ♪ >> announcer: executive edge is sponsored by at&t business our people and network will help keep you connected let's take care of business. d something different. oh, we can help with that. okay, imagine this... your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, asap! so basically i can pick the right plan for each employee...

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welcome back to "squawk. local deal making was a record $1.3 trillion. i say that with a "t." increase of 94% from a year ago with u.s. accounting for half of the deals. the excitement of spac is cooling. check out the spac 50 index.

before they formally announce a deal and to talk more about spac and m & a activity we have the global head of citi. mark, m & a is booming how much of that is a function of the spac market and how much of that will continue? >> andrew, thanks for having me. listen, what you see here is about 58%. my numbers will be a little different than yours $1.4 trillion volume over $200 billion of that is spac market. notwithstanding that the incredible quarter for spac, although slowing now, it pass 50%. separate that out it was roughly $1 trillion. fastest to $1 trillion regions are up in a big way.

six of the nine industry groups we follow are double what they were year-to-year basis. all are strong on volume of spac. >> mark, you personally, are a barometer of pure confidence in the boardroom, confidence in the corner office. ceos only usually make deals when things are going great. they should when things aren't they typically do when things are going great. in terms of the barometer and how are you feeling about it >> if you look at the fundamentals, this market is the best i've ever seen. i have been doing this a long time i don't think we can assume the trees grow to the sky and at end of the year we break all records. to your point, there are things on the horizon we have significant regulatory

potential headwinds and anti-trust and general protection policies around the world and major tax legislation in the offing. i think we have an economy with tremendous stimulus. that is a generally positive with the rising economy and the inflation out there. we are still not through the pandemic cases are up in europe i think there is a good bit of context and fundamentals are just a record. there is still uncertainty of what the back half of the year looks like >> what does the mindset right now of the high flyers when i say high flyers, tech companies and other companies have benefitted during the pandemic and their stock has run. how many of them are sitting around saying, you know what this stock is inflated i know it is inflated.

i need to go do myself an aol-time warner deal i need to buy myself a real company. you know what i'm saying here. >> sure. >> i wonder if companies are looking at what's happening in the marketplace and appreciating that their stock is pushed up beyond where it should be and looking around saying rivals of mine with great earnings and i should use that stock right now. >> unequivocally if you are a ceo of the board and your stock has done well, it aids confidence the irony, the transactions now are down relative to where they were during the height of the covid period the april to june last year. this is become a cash market again and cash and stock market. i don't disagree with you. with currencies where they are, the old adage is use it before you lose it.

there is a confidence which is driving the volumes we see now at the s&p trading 22.5 times past earnings. this is a high despite the correction while there is confidence, i still think there is a reason able amount of uncertainty ceos are taking that into act as they make these decisions. >> mark, it is good to see you and get perspective. i'm waiting for gamestop to use its stock -- rather than raise capital, i want to see them buy another company. if you were representing the company on the other side, whether you would accept the stock is the question. >> i don't comment on individual situations any time you look at somebody's stock, you have to decide if you are on the other side, if the stock is clearly valued in the market that is something that advisors do beyond that, i'll leave it

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coming up, the yield on the ten-year remaining below 1.75. helping tech stocks over the last month bond experts join us with the update right after the break

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the dow and s&p climbing to records yesterday. wasn't a multi-trillion $infrastructure bill looming the bond market remains relatively quiet, relatively calm joining us to talk to us what that might be signalling sri kumar, president and investment strategist at sri kumar global strategies

sri, you predict the 1.75. we hit that. next was 2 we're at 1.7 today what's your time frame on that, and are you getting surprised at the relatively small moves or slow pace that we've seen in the last six weeks or so >> one, joe, my guide is 2%. it's not changed i'm not surprised at the way the bond market has moved because i repeatedly said on your program it doesn't go up smoothly or go down also at the same pace, but generally moves a little bit and then something happens and it pushes up substantially within a short period of time my expectation is a lot of things are coming together the senate decided yesterday a procedure called reconciliation

which biden used to have the stimulus package passed can be used more than once during the fiscal year. so that means the ruling party can use it again before the fiscal year ends september 30th. so that is going to have an impact then you have numbers in trillions of dollars for infrastructure, spending going up to $10 trillion and they are all going to go into the market. so my expectation is as it seems more and more likely, and we see the inflation numbers pick up during the days to come they will get reflected in the bond market and don't be surprised if it jumps suddenly, moves up 10 basis points in a single day >> because at this point, in previous cycles where inflationary expectations of a gone up you would see a bigger

spread and you're not seeing it yet. there's something -- there's some dislocation there you think it gets, that we will see it be resolved with the ten year yields going up to 2% >> that is correct i think what you have seen so far, joe, is a substantial move. after all, remember we were at 94 basis points at the beginning of the year and we added 1.70 today. that's a big move to take place in just over three months. so, it doesn't keep going up sharply or every day and then reaction the bigger message the bond market as i can see collects four or five different data points and then it moves up in a hurry and i think that's what's still the case and i don't change my expectation on that at all. and the factor is clearly higher inflation expectations they are going to come the federal reserve is not going

to give up on its expansion. the fiscal policy is going to become more and more expansionary so there's nothing to hold the bond market back >> so, sri, a lot of prognostic thought global growth estimates were overstated. it caused you always to look at a questioning eye at valuations in stock market and that's not your thing the stock market, you just throw up your hands because you thought it's been a naked emperor for a period of years, nothing but go up. what do you do now just say i give up and i wouldn't touch it. you can't explain it, can you, in your view >> the stock market is being supported once again by

unrelenting expansion on the economic policy, joe the question is, i'm not going to be the person predicting and nobody can say when the correction will come because your previous speaker on the program talked about the future earnings that's, again, historically high level. can it be sustained over three months, six months, one year but every time that happens the fed comes in and provides even more stimulus. so people will have to decide for themselves whether they are going to buy 30 times earnings, 50 times earnings and at some point like the dutch mania of 1637 the whole euphoria gives rise to a bust and i simply cannot tell you when that will happen >> okay, sri kumar, thanks check back with you. we'll see a 10 or 15 basis point

move quickly depending on circumstances. we'll have you back. thank. andrew >> coming up, when we return we got a major interview you don't want to miss goldman sachs david solomon and former robhood wes moore teaming up combat the racial wealth gap. we also have former disney ceo michael eisner and what the post-pandemic landscape looks like

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pull back this morning after the dow and s&p surged to new highs yesterday. what you need to watch in today's trading session is straight ahead ways and means ranking member calling the president's proposed tax hike the biggest blunder of our lifetime. he'll join us to explain that view closing the racial wealth gap. a new initiative being launched by goldman sachs david solomon and wes moore. they will join us and tell us what it means for corporate america. "squawk box" begins right now. ♪ good morning and welcome back to "squawk box" here on cnbc i'm joe kernen along with andrew

ross sorkin. my finger is moving but that's just like in that movie, it's hard, hard, very hard, hard to control. hard to control but i'm not going to -- becky let's it loose once in a while. will move around and stuff even on camera. i don't recommend it up eat on camera i don't recommend that either. it's been a while. usually when we're here. >> national doughnut day is coming up in june. i think it's the first week of june so i'm preparing, steeling myself for it. >> doesn't krispy kreme give you a doughnut every day if you get the vaccine. >> i just heard that there's one ten blocks from me so i guess i have to make it a regular thing once i'm vaccinated >> you're not yet? still haven't? >> nope. still working on it. >> that's not right.

there are states where everybody is done. you go in, doesn't matter how old you are. what's going on in new york? they put a man on the moon, supposedly >> i should say i'm one down i have the second to go. >> oh, you do. you did get one? >> then you got to wait. that's why i'm not there yet >> okay. good you got the appointment. okay that's in interest of full disclosure >> we're on our way. >> moderna, pfizer >> moderna as it happens >> sore? >> yeah. wasn't terrible. >> no. no either one for me, no biggie i told you that -- i told you what -- i told my wife after the second one i kind of felt like i had a slight hangover the next day and my wife said you had a couple of margaritas last night. you're right

i don't know it probably was not the -- it probably was a slight hangover so i had no -- for anyone who was worried about it i had zero. you? >> i go back -- call me a couple of weeks after the second one and i'll give you a full review. >> not to worry. not to worry have a couple of cocktails >> have a couple of cocktails. meantime let's talk about some of the big headlines this morning. credit suisse will take a $4.7 billion hit stemming from losses due to a u.s. hedge fund in conjunction with that announcement they announced a management overhaul. they are replacing the head of its investment banking unit. southwest airlines are recalling 200 pilots as they are looking for a rebound in travel. they will need to go through

required training. elevately, auto industry group is asking the government for help in dealing with the worldwide chip shortage. the alliance for auto innovation saying the shortage could cut production by 1.3 million vehicles this year it's asking that part of that funding in new stimulus bill be focused on expanding production of auto specific computer chips. >> you felt pretty good, didn't you, andrew, taken the worst c case it's an invigorating feeling >> it is i still have to wait to move through my system so i have even the first protection early days >> i know. i know but the days go by so quickly. believe me when is the second one coming. it came and now a second month but still, i don't know, where

the psychological effects linger, i guess to some extent moving on. >> biden has said he plans on paying for his $2 trillion infrastructure package by raising taxes on corporations but republicans are fighting back texas congressman kevin brady going as far as saying that this is the biggest economic blunder of our lifetime. congressman kevin brady joins us this morning he's the ranking member of the ways and means committee and one of the key authors of former president trump's tax cuts and jobs act congressman, thanks for joining us we may never know, congressman, whether those corporate tax cuts that we saw really were benefiting lower wage workers and now i hear the narrative from the left is that we didn't see the capital spending that we expected you can't deny we were

repatriated more from abroad and looked like we were seeing some progress on organic wage growth and here we are set basically to reverse a lot of that. >> yeah, joe there's no question that we achieved all those goals 2019 is a great example, two years after we did the tax reforms and tax cuts we saw the largest jump in household income in almost half a century, in fact larger in one year than all eight years of the obama-biden administration we saw the lowest poverty rate in half a century as well. and in same year we shrunk income in equality for the first time as long as we can recall. a lot of that came because of growth in blue collar workers. we were drawing people into the workforce that had been forgotten and as a result we saw, you know, sort of the social gains that we had all designed for in tax reform

that's why right now having the president propose a $2 trillion tax increase as we're working our way out of the pandemic. no president has ever raised business taxes to rebuild an economy and then to drive our rates worse than china's and on par with syrias, at the end of the day we'll see slower hiring, less investment in the u.s. and i predict we'll see a second wave of u.s. companies inverting or moving their headquarters overseas in long run that's why i think this is such a major mistake. >> i don't know how closely you follow, i'm sure you know. senator manchin said i don't like 28. there's a lot of talk about 25 would 25 be still going in wrong direction in your view or could that be something that republicans finally say all right we want this, we want that, don't do this, and we'll let do you that. would that be a bargaining chip,

25 or is that still too high >> it's definitely the wrong direction because since we lowered our tax rate and became competitive ten countries have lowered theirs they are not spending just america decided to get competitive and as a result that draws more investment in jobs overseas if anything, while we're making the tax cuts and jobs act permanent. at the end of the day as well looking at the biden tax proposals, they made changes in international rules that seem in the weed for most people the bottom line is they end up double taxing u.s. corporations and workers. they punish them for doing research and advancement here at home and in effect they make it better to be a foreign company operating in america than an american company so they are going so far in wrong direction. there's so many jobs at stake here let's not compromise on

rebuilding this economy. >> what would you do let's say that you become convinced we can't cut our way into trying to pay for some of these programs and that we do need to raise revenue. would you go back to 39.6 for individuals, do something with capital gains, would our corporations just leave them alone and do everything on the individual what would you do? a corporate amt, globally, something like that? >> all of those are big mistakes in incentivizing investment in u.s. doesn't make sense. i would sit down with republicans, let's put together a real infrastructure bill then let's look at the user fees that traditionally pay for this infrastructure to see if we can find a way forward just in fiscally responsible way that's what i would do

>> congressman, what do you think of a couple of ideas that have been advanced recently that there is something like 600 billion to trillion dollars over the course of ten years that effectively should be paid in taxes that isn't this is not people skirts the rules, this is people that are doing things frankly that are illegal that the irs just is not able to pick up because the irs unto itself is so drastically under-funded and that if we were to do such a thing you might not have to even be having the conversation we're having about raising taxes if we just funded the irs to begin with. >> yes so, andrew, we looked at this pretty hard in ways and means committee because we don't want tax evasion, we want full tax compliance for individuals, for small businesses, for big corporations as well corporations right now are about 9% of the missing payments

there's a lot more irs has always failed to make the argument that even if they hire 15,000 more agents that they would make much of a dent in what's called the tax gap we think smarter auditing helps us we think a more simplified tax code, the opposite of biden's helps us a great deal there. of course, as you know, we are seeing tremendous amount of fraud here in pandemic $2 billion alone in unemployment area there's a lot more money that has not yet been seen in unrelated areas, one related covid. i think there are savings we could start with that wouldn't fill the entire infrastructure bill but could help get this a good start on it >> i just want to go back to this tax issue because this according to the irs unreported

income is the single largest reason that unpaid federal income taxes may amount to more than $600 billion a year that's a year. i underplayed it 7.5 trillion dollars over the next decade and the argument is that for every dollar you spend, give to the irs, you, of course, get multiples back you think that math is somehow wrong? >> it is when irs is testifying and irs tax advocate knows testified and the inspector general made the case when you put the math to it, they can't come close to closing that tax gap by hiring tens of thousands of new agents. it really does take a much smarter priority in auditing which they admit needs to be done, and at the end of the day -- >> shouldn't we do that then if we could buy ourselves $100 billion annually or $200

billion, even buy ourselves $50 billion wouldn't that be a win >> andrew, this is the unicorn that everybody keeps chasing the fact of the smart our tax code is too complex. to close that tax gap you would have to be so evasive in individuals, farmers, small businesses lives that the american people would revolt at that type of intrusiveness that's why you really have to look the at the smarter auditing of course, we have massive amounts of fraud in our tax credit programs up to 30% in earned income, child tax credit that for some reason congress is not getting serious about closing that too and help us capture more dollars >> congressman, when it polls, infrastructure bills do pretty well because people immediately

think wow, we don't want bridges collapsing so now we have seen a pretty big expansion on what counts as infrastructure, that's number one. wi-fi. and maybe in modern economy you need to update what you view as infrastructure and i get that but there are some that point out that there's a lot of new green deal stuff here that's sort of finding its way in the legislation without a lot of fan fare, without saying aoc screaming 10 trillion we need for the new green deal but a lot of it we're taking pretty large steps headed there anyway and it's not really just infrastructure plus then there's how difficult -- no such thing as shovel ready when you have the permitting required for a lot of different reasons. do we really get anything done if we try to do that if we don't make it easier to do a lot of this stuff in terms of permits and regulations? >> yeah. the short answer is just what

you said over time infrastructure investment, smart ones can help grow the economy over time my point is the tax increases negate all of that but that's a great place to start because, you know, i think there's universal roads, bridges, airports, broad bandrod there's no difference on democrats and republicans on those key priorities it's when you go into all the social spending. and my point is just as the recent covid bill had very little to do with covid this infrastructure bill has way too little to do with real infrastructure that's where we ought to start and try to find some common ground >> congressman, before you go, i want to get your thoughts, have you weigh in on this voting bill in texas in which a number of large companies in your state called out, delal and american

airlines restricting voting and suppressing the vote what's your take >> the facts on the ground don't bare that out. the texas law as i read it at the state legislative level actually increases voter access over what we were in pre-covid it does some i think common sense voter integrity, voter i.d. not have local officials play the game, put drop boxes in their favorite partisan area do it in proportion where eligible voters are. more of a fair system. when you look at the facts it expands voter access and increases integrity. in pretty common sense ways. >> why has this become such a partisan issue and if it is such

a partisan issue why have we seen corporations across the country coming out against these type of voter bills? >> well, the corporations have to answer for themselves but i do think heading in to the november election, almost 60% of voters indicate they didn't trust results of both parties. that certainly grew worse for republicans after the election but setting that aside -- >> we know -- >> so we've seen this diminishment of voter confidence for the last two decades, and i think this is as you said there's no need for this to be a partisan issue both parties have a lot at stake in making sure people accept results as i do. but that has to be done at the state and local level not nationalizing these elections. >> so we're on the same page if that's the case shouldn't we

encourage more voters, make it more accessible in every way possible even if it costs more money to do it rather than to do what i think a lot of people think looks like gerrymandering. >> well i have to say if you ask people should there be voter i.d., in other words those who vote should they be who they are, the support is overwhelming in support of that should we have expanded early voting, weekend voting, more convenience in dropping off your ballots, absolutely. that's what the texas law and georgia law does as well, so i think there's a gap between the facts here, andrew, and the perception and i think that's where work needs to be done. >> congressman brady, thanks for being on the program this morning as always and we hope to see you again in near future >> thank you, joe, take care on the other side of this the rise of ransom ware.

why corporate america is paying big bucks to hackers we'll bring you that story after the break. let's get a quick check of the be markets right now after a very big day right now looks like the dow will open off 30 points. s&p 500 off about 8.5 points we're back after this. nal. a cfp® professional can help you build a complete financial plan. visit letsmakeaplan.org to find your cfp® professional. ♪♪

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we got a quick news alert for you. trading card company tops going public via spac in a deal that values the company at $1.3 billion. transaction includes investment of $250 million from spac's sponsor along with investors danco and former disney ceo michael eisner we'll speak to michael eisner in the next hour. bazoka gum and folks like gary v. and others who have been living in this space and nft world. part of this is what will happen to these cards >> that's what it's going to be. if we are talking topps that's

where you head >> where it all goes >> you know what, no one of chewed that gum, i don't think >> bazooka gum they don't put it in the card packs any more because they think it ruins the card >> it was always stale it would crack no one bought it for the gum that was an accuse did you ever chew that >> i used to eat it. didn't always taste great. i think they sell bazooka gum separately >> with the little cartoons is good i can't remember his name. terrible to get old. bazooka joe. >> look at that spac up 20% on that news right now. >> this is you >> and let's continue -- sorry

about that kp corporate america is making a big payment to hackers we go to eamon javers who is in washington looking at the extortion economy. >> reporter: yeah. andrew, that's right this is really happening to a lot of companies this is a real ransom note that was recently sent to a company that was attacked by hackers this is what it looks like when you get attacked it says your network has been infected your documents have been encrypted and to get them back you have to pay is what this ransom note is telling you hackers want a hard to trace crypto currency called monerno you have limited time to pay these hackers or the price will go up and you might not get your data back. that's pretty scary stuff for a lot of companies ransomware is surging and so is demand for negotiators

there's a cyber company that helps victim companies deal with the attack and necessary payoff the crooks to get their data back >> some clients are extremely angry. a lot of these victims are also in shock >> reporter: now the first thing his team does is figure out if they can get back up and running without the hackers intervening. if they can that means they have to talk to the bad guys even though the fbi advises company not to send money to criminals he says hackers base their ransom demands on internal financial documents they've stolen they know your company's financials or know the limits of your company's cyber insurance one hacker recently demanded a $70 million ransom although that company didn't end up having to pay the 70 million that gives you a sense of how high these ransom demands are. his goal is to get the data back

and to get that price down >> a ten person law firm, that ten person law firm may have politicians as clients and, therefore, that ransom may be extremely high versus may have a fortune 50 company where the ransom is lower because they only have a certain portion of their data >> reporter: now once they agree on a price, bleicher executes the payment almost always in crypto currency. once the money changes hands hackers almost never walk out of the deal because they want the next victims to pay too. now different industry groups are paying widely divergent ransoms. health care pays $140,000 on average. finance pays about $210,000. the average ransom in the tech engineering telecom space is over a million dollars you can tell which the industries are dependent on that data, guys back over to you >> unfortunately it's rich in

stories for you. i have the impression that you can be more of like a gum shoe investigative out beating the bushes and perhaps not always be innocent and i'm just wondering whether it opens up the possibility of -- would this give you the opportunity to wear, because you said some bad things about what andrew and i wear in the past i want to open up the positive you being in a pair of abc pants without beating the bush >> reporter: if you're doing cyber security stories on tv you have to wear gloves while tapping on the keyboard. that's the graphic they show on tv and blue lighting and gloves and all that >> let us know >> reporter: never yoga pants. i'm drawing the line >> okay. he doesn't know what he's

missing. >> reporter: i'm wearing sneakers right now because i'm sitting in any basement's laundry room >> you're a gum shoe >> reporter: if i put some of that bazooka gum on my shoe -- >> got a magnifying glass, looking around, computer stuff very cool. thanks we look forward to an interesting group of people and important to companies >> getting more and more important and bigger and bigger, unfortunately. coming up a way to close the racial wealth cam. david solomon and wes moore will join us. "squawk box" coming right back you got to move the phone in front of you like..like it's a mirror, dad. you know? alright, okay. how's that? is that how you hold a mirror? [ding] power e*trade gives you an award-winning mobile app with powerful, easy-to-use tools and interactive charts to give you an edge, 24/7 support when you need it the most and $0 commissions

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welcome back to box. this morning a new initiative announced just this morning to help close to racial wealth gap called ninety to zero goes to transform the economic landscape. organizations commit to growing back ta black talent wes moore and goldman sachs chairman and ceo david solomon

good morning to boston you look at you guys in person together we haven't had this opportunity to do interviews with folks together wes, i'll start with you great to see both of you gentlemen. how did this come together and what does it mean? explain it >> really what happened was last summer a collection of leaders across sectors, so leaders from the finance industry, great leaders like david, folks like derek johnson from the naacp but a handful of folks got together and said we have a coordinated problem that we have to deal with and only way we'll deal with it is a coordinated solution really the problem we're trying to solve was the fact is there this is this 10-1 racial wealth gap between black families and white families the ability to solve any challenge became more and more difficult and impossible if we don't deal with fact this racial

wealth gap impedes in form of growth prorg so the collective idea and collective action was to say we want to pull together groups from across every single economic level in the united states whether it's the corporate sector, whether it's the nonprofit sector, philanthropic sector or universities, anybody who we know controls the economic levers of the united states what can we do to address the racial wealth gap and how do we move collectively to solve the larger problem as we find ourselves. >> so, david, what does this mean for goldman sachs in terms of targets and goals and hiring and money you'll spend on this issue? >> so, andrew, i appreciate the opportunity to be here with wes and support wes. it's wes' low pressure over the last nine months driven this initiative and brought this interesting group of people together to try to make progress on this. you know from our own initiatives and we've talked about this before, one of the things that we really believe and we learn this from our

10,000 women program, 10,000 small business and now the launch of 1 million black women, research and metrics and ability to keep people accountable for making investments that can move things forward is important. one reason why i signed on to this initiative with wes is i looked at the things we were doing in our various programs and said we're doing a lot of this but this gives us a another set of goals where we can use our capital and resources to make darchs. a lot of this will come out of our existing programs but we'll look over the next decade to find other ways to be accountable for making investments that we think can make a difference here and ultimately drive growth and gdp and participation in our economy which is obviously something we all believe in and something we want to see occur. >> have you set specific targets inside of goldman sachs? >> we have we've done this, you know, before 90 to zero. we really believed with recruiting and our own diversity and inclusion efforts inside the

firm setting aspirational goals, creating transparency and moving towards those metrics and goals and holding managers and leaders accountable is a very important part the way we advance dwefrt and inclusion in our organization and it's a good model for most businesses. most leading businesses at this point in time employ some sort of process in doing just that setting goals and holding people accountable. >> do you expect shareholder to hold you accountable for those goals as well? >> one of the thing we're seeing increasingly, andrew is shareholder care about these issues one set of broad issues that the there's a greater focus on part of capital allocators. people believe diverse and inclusive organizations and progress in some of the issues that wes is highlighting this morning drives additional economic output which brings everyone along so i do thing that capital

allocators do think about these issues and more and more in the dialogue that we see with shareholder and capital allocators broadly >> wes, weigh in on this a lot of business leaders this grappling with issues what they should be doing in their company or how outspoken they should or shouldn't be we saw this with voting laws we saw this in georgia some big companies coming out publicly in texas. how do you think a business leader is supposed to think about speaking out and can you do one thing inside your company and either be silent or not on the other side because people say well people are hypocritical if they give money to republicans on one side but say they care about these issues on another. give us your thoughts. >> i think the voting law piece

is an important one because it's imperative for us to remember it was actually, you know, it was the atlanta falcons who were the first team to open up their stadium. you know there were 39 stadiums that actually used their stadiums and sports arenas as voting centers. what we're seeing now is more of a continuation than a deviation from what we've seen in ability to protect voting laws we think about this came in terms of the larger conversation that ninety zero is hoping to drive for our corporate partners the answer is even if you're not going to do this to be selfless do this to be selfish. your customers are moving on their values your customers are moving with organizations and platforms that they feel share their values and share their instincts. so you are watching companies that are being rewarded for being able to understand that our corporate weight and

corporate heft can change society. whether you're talking about apartheid in south africa or changing football team names, corporate weight matters >> david, i have to ask you about a couple of big headlines. first credit suisse saying they are going to take a write down of $4.7 billion ahead of risk and ahead of their investment bank, effectively losing their job. goldman sachs, appears has gotten out of this unscathed what's the lesson. what do you learn from this? >> i think this is a classic case of an investor with concentrated positions it's important to take down risk we know this is not the first time this has happened and not going to be the last certainly see this again from my perspective, our risk controls worked well we identified risk early on. we took prompt corrective action

to lower our risk. i can't really speak to what other banks have done and how they handled the situation but i'm pleased with the way our team handled it. there's a larger question here around process by which investors create transparency around their economic positions and how to handle more complex equity products in our system. i think that's a topic that deserves debate. i think it should be reviewed by the sec and i certainly expect, shows again to take a view on that and more discussion on that from a broad perspective what happened here is something we've seen before, we'll see it again and why risk management systems and organizations like ours are very important we don't always get it right >> david, was it true it was some young first year guy, like 1:30 in the morning on a saturday night looking over some stuff, working 120 hour week and

found out archegos stuff is that what happened? >> i don't think that's what happened but sounds like a good story. our team worked tirelessly around this. >> i don't this we've had you on since that ridiculous story. i mean, cramer said to be able to work at goldman, you had a line of 10,000 people trying to get in there once you get in there you're going to start grousing. there was a quote, if you don't show up -- if you're not in on saturday don't even bother coming in on sunday. have you said that >> i think the important thing here, joe, is to recognize we're in a very unusual time i've been doing this for almost 40 years i've never seen the velocity of transactions and volume we've seen over the course of the last couple of months it veal an unusual time in terms of the amount of activity. we're here to serve our clients and we're very, very busy and that forces people to be engaged

more and work harder there has to be balance and guard rails. it's something i'm passionate for the last ten years in a 24/7 connected world we have to find ways to help people especially young people transitioning into the professional world to have some balance. we've done things over time to help those guardrails exist. goldman sachs will always be a competitive place, always place where people work hard and lots of reward for that effort but at the same point in time we know that this is a time where there's more work going on because of the velocity of business, the pandemic makes it more difficult, and so we need to be, you know, we need to help our people at a time like this and so we're doing some things, hiring some people that you can't flip a switch and we're very focused on it >> david i want to go back to one thing about the archegos situation. what do you think has to happen there in terms of the idea that somebody could have these total

return swaps and the market wouldn't necessarily know it in terms of how much ownership they really have? what would you do? >> i think there's a reasonable debate going around transparency around derivative products one thing that you know has been going on for more than a decade. i think when we look at the concentration of some of these positions it's reasonable to have a debate about whether or not there should be more transparency in equity markets around some of these complex equity products and i think we'll see that debate and potentially could be some movement in the way transparency works around that market stru structure. >> was it a mistake to be in business with bill hwang and the risk he was involved in all together >> i, andrew, don't think going back and second guessing decisions like that at this point is the answer to this. you know, we look at the way we have clients, we go through a rig prous sees

the fact that somebody had concentrated positions and over levered and, therefore, there was money loss that's part of the way the system works the debate around transparency is important and i think with more transparency that might help as we go forward. that's a forward discussion here where do we go from here is the right way to think about it. >> i got to ask you. we heard reports last week about plans in crypto specifically in bitcoin for clients. what are you working on? >> we continue to think about digital currency and the digitsization of money in a proactive way. in that context we're engaged with our clients and looking at this what do our clients need. as you know, andrew, there are significant regulatory restrictions around crypto

currencies like bitcoin but we can't help clients facilitate custody positions and digital assets and as our clients have demand to be involved in this space we continue to find ways we can support our clients and that's the lens we're looking through. >> would you like to be able to act as a principal in this regard are people pushing in washington to have those rules changed? >> i think that this is a space that's evolving. this is a space that we're trying to be responsive to our clients in how we approach it. i think there will be a big evolution how this evolves in coming years we operate and the rules we have, i won't speculate where the rules will go but we'll continue to find ways to serve our clients as we move forward >> okay. david slow moan thank you for answering those questions we appreciate it. and wes and david together i want to thank you both for joining us and bringing us this news about this ninth ninthy too

project. we hope to follow your progress. thanks guys. >> thank you thank you for having us. >> great to see you. joe? >> coming up stocks on the move this morning bank of america security strategist on why the s&p 500 isn't necessarily a pure reflection of the economy. and speaking of the s&p 500 here's a look at this morning's winners and losers "squawk box" is coming right back some say this is my greatest challenge ever. but i've seen centuries of this. with a companion that powers a digital world, traded with a touch. the gold standard, so to speak ;)

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welcome back to "squawk box" take a look at futures right now after big day yesterday. looking to open lower this morning about 22 points lower on the dow. nasdaq off 22 points as well s&p 500 off about six points we should tell you snap shares are trading higher following an upgrade in atlantic equities which raised the snap stock. we got so much more coming up this morning in terms of big

movers, markets and where you should be ttpuing your money to work when we return after this

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let's talk markets joining us now, head of bank of america securities we promoned your segment saying maybe the s&p 500 doesn't reflect the economy. is that a fair appraisal that

someone had me read? >> yeah, i think that's a fair appraisal, joe thanks for having me on. yeah i think the reason that i think that's the case is that if you look at last year we had, you know, the market were at all time highs amidst a global pandemic, the worst recession ever and i think that, you know, nobody would argue that the market essentially anticipates good news rather than reflects what's actually happening at this very moment so i think what's interesting is we saw massive expansion in s&p 500 last year despite the fact that we were all sitting at home and the economy had ground to a halt it's a couple of things. the s&p 500 is very tech heavy the proportion of tech in s&p is three times the proportion of tech that christianitys to the u.s. economy and tech has obviously been a leader in this, in this, in this sort of global pandemic environment and as

covid stay-at-home environment a lot of differences between the market and economy which really leaves with us this feeling that okay the economy will do great this year, no doubt, but or a heck of a lot better than last year and we expect to see corporate earnings come back to light pretty aggressively. we expect to see 20% earnings. can we get 20% market returns? not likely that leaves us sort of neutral on the stock market whereas we're more bullish on the economy. >> i don't think that's a new position for you i don't remember what your target of last year. i just don't ever remember you saying buy this market to your clients. i know price target this year is 3800 so markets moving away from you again like it did for most of last year will you ever say buy this market, it's going to -- >> i absolutely would. i absolutely said buy this market in past

it's really -- environments like 2012, 2015, 2017 where sentiment was very negative to neutral where you saw the multiple for market at much lower levels than where we are today where you saw the appetite for stocks much more risk averse than where we are today. when we look at the combination of signals that drive us to our market out let what we're seeing today we're seeing more pockets of opportunity across sectors rather than a wholesale bid on the s&p. what i do really like and i'm emphatically endorse the is the russell 2000 i think investors would be well served by buying smaller cap company, by buying cyclical companies, industrials, financials, high quality cyclical stocks. there's lots of stuff to buy, joe, and i've been much more bullish than i am today on the s&p 500. but today when you look at sentiment, you look at valuation

you look at what the market is anticipating there's not that much more to go for large gap u.s. stocks. >> a lot of people think we're in for some type of correction at some point this year and that's not even 10% i don't think. one of these days. russell 2000 thanks >> thank you >> andrew? >> when we come back biden laying out a proposal to raise corporate taxes to help pay for his infrastructure plan. we'll have the debate about all of it next plus trading card company topps going public we'll speak to topps chairman and former ceo disney michael eisner you don't want tmio ss it. "squawk box" returns right after this this topps

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public blank check deal that has the market gotten too over saturated lately we'll answer that question we'll talk to the sponsors and topps chairman former disney ceo michael eisner good morning welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin along with joe kernen. becky is off today so you're stuck with just the two of us. we have an hour more to be stuck. i know, it's a hardship. but take a look at the futures at this hour let's show you where things stand relative to where things were yesterday because we were hitting new highs. dow is off 27 points nasdaq off about eight points,

s&p 500 off about five points. we'll flip the board around and show you treasure apology yields ten year is hovering at 1.69 and we should also show you the "squawk's" spac this morning, show you a couple of things we're watching and maybe -- i don't know if you want to add anything to the "squawk" stack credit suisse on our list announcing that they are getting -- they lost $4.7 billion on that archegos transaction, also saying good-bye effectively to their risk manager and the head of the investment bank as well and bitcoin this morning trading at about $58,600. >> the crypto world is at 2 trillion now half of that with bitcoin.

i guess gamestop still pretty interesting. you're right that could be the next -- sell some stock maybe and use it as a currency, if you could but i don't know the guy's strategy i don't know how he does it. i don't know where i would go. but, certainly got to do something with that currency, don't you? >> you know, maybe if gamestop -- gamestop could have tried to get in here and buy, maybe could buy topps now that topps is a publicly traded company. sell the cards i don't know >> what about your kids' game that they spend all your money on, blowing a thousand bucks a week on. >> yeah. unfortunately the market cap is about, what do we have about $30 billion. i don't think that's happening that's the problem in fact, that is the problem of gamestop

road blocks, fortnight, all these other big -- those are direct to consumer don't need go the store for them >> can't beat them join them about a year after threatening to cut thousands of jobs today american airlines are planning to make key hire. demand for air travel picks up so phil lebeau joins us with that breaking news >> reporter: united announcing it will be opening a new pilot training academy in the phoenix area this year, and if you take a look at shares of united keep in mind they planned on doing this back at the beginning of 2020 obviously what's happened in the last year had them change their plans but now they are planning on opening up what they call the pilot training academy and making a specific goal with this academy. they plan to train 5,000 new pilots, bring 5,000 pilots in, work them through the academy, graduate them, have them flying for united airlines by 2030.

their goal is 50% of the new pilots will be either women or people of color. currently less than 20% of united's pilots are women or people of color. this comes at a time when the airlines not just united but all of them are facing a pilot shortage that's going to be more acute over the next decade as you see more pilots retiring, hitting mandatory retirement age so the airlines are aggressively saying what do we need to do to make sure we have enough pilots to fly our planes as we expand our schedules over the next decade and of course they will be expanding their schedules this summer you saw the news from southwest airlines saying it plans to bring back a little over 200 pilots who had taken a leave of absence as they expand their schedule this summer united airlines doing what we might see more airlines do and that's take a more aggressive stance when it comes to recruiting and hiring and training future pilots guys, back to you.

>> delta actually had shortages which is hard to imagine because we're still -- if we were doing same store comps or something we would be down so much. i don't understand i guess -- >> reporter: you just can't flip a switch and say okay, whether it's pilots, flight attendants, workers on the ramp it's not simple a large logistical operation what happened with delta over the weekend because they didn't have the staffing for several dozen flights, they then were able to accommodate almost all of those passengers if not all of them by putting them on other flights. remember they had the middle seat that was blocked. they did not block the seats on those flights they put these passengers who needed to get on flights in the middle seats in some of these flights. what you're seeing here is sort of that bumpy re-opening that everybody in industry warned would happen if you see an immediate surge in demand, you've got to make sure you have

the pilots, the flight attendants, the crews, everybody in place and easier said than done >> sorkin, you got to pick, sorkin you got to pick. you're at the game in texas with 40,000 other fans, all sitting with each other outside, or you're in the middle seat on a delta. which do you pick? >> i think i want to go to the game >> i think outside, maybe. >> phil, i don't know. middle seats i'm starting to think my deep seated feelings about people in general have now been -- i've been okay with those feelings of not wanting to be -- >> reporter: joe, i have taken flights in last two weeks, i took a couple of flights middle seat somebody sitting next to me, yes in the middle seats. it's the way we were flying for years. >> maybe they don't like me. maybe that's it. >> reporter: that's a possibility right there.

>> you didn't have to agree that quickly, phil. [ laughter ] that's a decent question, andrew, the game or -- phil you've done it all right. you vaccinated, phil you are vaccinated >> shot two is coming up >> shot two is coming up so i think you're eligible for those krispy kremes too. not suggesting it but just putting it out there for you >> all right maybe some day we'll laugh about all of this because we could use a laugh after the last year. >> we could. let's tell you some other stories that investors will talk about. credit suisse planning to take a $4.7 billion hit due to dealing with hedge fund archegos capital management which imploded about a week ago thanks to those bad bets on media stocks credit suisse announcing its

chief risk officer and head of banking will step and begin an investigation into those related losses >> moderna striking an agreement with contract manufacturer catalent to double vaccine output it would rise about 80 million vials. senior research analyst saying shares of electric carmaker tesla are worth only about $150 each or calling tesla only a minor player in the u.s. and european markets it tells cnbc people wrongly assume tesla has no competition. that stock trading at $694.11 this morning, joe. >> early this morning we spoke with house ways and means committee member kevin brady about biden's plan to raise corporate taxes to help pay for

his infrastructure plan. here is congressman brady's take >> at the end of the day we'll see slower hiring, we'll see less investment in the u.s. and i would predict we will see a second wave of u.s. companies inverting or moving their headquarters overseas in long run. that's why i think this is such a major mistake. >> joining us now to talk about the potential effects of raising corporate taxes isserica work an economist with the tax foundation center for federal tax policy and brookings institution senior fellow in economic stewstudies eric cline. do you not acknowledge that we were starting to see before the

pandemic some growth in wages at the low end, organic growth and very low unemployment, great minority employment numbers. we were seeing a lot of progress the there. you don't think reversing the corporate tax cuts would hurt in anyway >> joe it's a pleasure to be here let's start with the fact at the end of that boom that began in 2010 was great we had strong wage growth. we had low unemployment. but in order to continue and lay the seeds for the next generation of economic growth, america needs to reinvest in herself. this type of infrastructure situation needs to be paid for look freeways aren't free. that's a pretty conservative principle. the question is how to do that in terms of your tax argument, look president trump slashed corporate taxes by 40% and corporate tax revenue fell by 40%. he claimed this tax cut would

pay for itself no it piled on more debt corporate taxes pay about 1% of gdp in america today in germany corporations pay 2% in england they pay 3% in canada and japan close to about 4% look in go-go '90s where we had strong wage growth, good unemployment numbers, corporate tax figures were up 2% gdp even if biden's plan were enacted as proposed still be a little bit less than 2% of gdp so i don't see any problem in fact to the contrary when we had corporate tax, corporations actually paying taxes at this level the economy has been just as strong in past. >> erica, the boom began in 2010 so sort of just the tail end, didn't have anything to do with the corporate tax cuts would you raise taxes to this extent at this point, or maybe

after we've recovered more from the pandemic when would you do it or never? >> so i think it's important to pay for infrastructure investments but it's important to do that in a way that's not so economically damaging the corporate income tax is the most harmful tax for economic growth and even though corporate taxes may have been high in the past across the globe we've seen not a race to the bottom but a race to the tax code raising the corporate tax rate to 28% plus another $900 billion of corporate income tax hikes would be going in the opposite direction. place us in a competitive disadvantage and when we think of comparing us to other countries something that's different in the united states is we have a large sector so if you look at corporate receipts as a percentage of gdp we'll look lower because so much of our business is reform. so if you equalize that and look

at other comparisons o effective tax rates we're no means been outlier we're above average compared to our peers. >> it's been pointed out that infrastructure now covers a wide range of projects that we're talking about. we're hearing some criticism that there are long-standing wish lists, wish lists items in democratic agenda that made their way into this. you said highways aren't free, bridges need to be repaired but this is a very big bill. i heard 6% just highway, bridge, only 6% goes to that type much classic infrastructure that they were talk about but then you throw in all the other things that we now refer to as infrastructure is there any truth to that, that the there's a lot of things that shouldn't to be done right now we shouldn't be trying to pay for some of these things right

now inthey are just long standing wish list from the liberal agenda going way back? >> joe, that 6% number is just made up of whole cloth the idea it's just roads i worked on what's called the highway bill in 2005 that's always included public transportation you include things like getting rid of lead in drinking water. to me that infrastructure. clean water is $100 billion in this situation you put that 6% number doesn't include airports, doesn't include rail, doesn't include lots of things that everybody would agree to as infrastructure you raise a valid point. is all $1.9 trillion, where do you draw the line between infrastructure and research and development. congress will make some of these calls and whatever the administration puts out congress will change in teams of its priorities the key point that has long bipartisan consensus is america needs to fle vest in herself

president trump promised infrastructure bill but he engaged in slashing corporate taxes instead as his priority. i think it's important for america to reinvest in herself and it's important to realize corporations benefit from this infrastructure when we -- eisenhower built the interstate system it unleashed a wave of prosperity that corporate america enjoyed. invested wisely corporation will reap much of the benefits. >> erica what would the tax foundation, your organization say is the best way to raise revenue for something like this without hurting economic growth and corporate profit >> traditionally infrastructure investment has been funded with taxes that operate more like user fees. something like a gas tax congress could look at something like a vehicle miles travel tax to address the growing share of electric vehicles that wouldn't be subject to a gas tax. we could also think about

something like a carbon tax that meet climate goals and pay for the plan just broader based consumption type taxes tend to have less distortionary impact on the impact when we're talking about goals of increasing investment both public investment through the spending and private investment too through r and d initiative, increasing the corporate tax rate will increase cost of investing in america so you would be reducing southeast growth potential from high return infrastructure investments by funding it with a damaging tax source. >> so you got the electric vehicles in there. that's one problem okay so you got that. but then might be regressive you need some type of -- for low end, you need to have some -- it's too big of a nut for lower end people to pay, right, a gas tax? you need a rebate or something

how would you do that? that's a progressive thing i'm saying you're supposed to go like this when i'm on your side. >> the gas tax should absolutely be on the table. it hasn't increased. it was 18% of the price of pump when it was last raids now down 6%. this ev thing there are more ford f-150s that were sold last year than all electric vehicles. >> sorry to cut you off. we'll have you back on i like all this research into these things it helps us make us an informed decision which you usually don't do in congress all right thank you both appreciate your time this morning. thanks >> okay. coming up an interview you don't want to miss the ceo of lumina will talk about some early first quarter results just announced

his response to d.c. regulator whose are challenging a cancer test company grail stay tuned you're watching "squawk box" here on cnbc. francis desouza.

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the government moves to block the multi-million dollar kicks of grail meg terrell joins us now with a special guest. good morning, meg. okay no audio at this point we'll check with meg, find out exactly what's happening we'll take a quick break sorkin, you didn't hear either you never know, right? sometimes i check back here and never know could be you could be me. you know what? watch this i just did something, like do you remember "bewitched," samantha i just got you back, meg >> reporter: i assumed by audio was working or they wouldn't put me on camera all right. i know francis is there.

francis your stock moved quite a bit last night on first quarter results where you noted your customers are mostly back at normal or even pre-covid levels of activity. tell us what your results mean essentially for you getting back to normal? >> yeah. yesterday we announced really strong q1 results that exceeded even our expectation coming into the year we knew we had momentum and we talked about fact in the second half of the year our revenues grew 17% we talked about the fact we were coming in with some really strong momentum but the q1 results were stronger than we even expected. we reported revenues of billion 85 and we talked about the fact going into the rest of the year we're seeing really strong indicators our orders coming into the quarter were at record legals of 1.4 billion.

highest quarter we ever had. one of the other early indicators is purchasing of our sequencing instruments which was up 120% year-over-year so we're walking into the rest of the year with a lot of tail winds. i think a number of things are causing us then to say look we'll raise our guide for the year and at the beginning of the year we said we expected revenue growth this year of 17 to 20% and given the strength we're seeing in q1 we now raised the revenue guide for the year to be between 25 and 28% revenue growth this year compared to last year. >> reporter: one of the things you're also doing a lot of is sequencing covid-19 or sars covid-2 samples to help us track these variants and that add ed 50 million revenue in first quarter. tell us about the strength of that business, how long you see it being needed? is this the beginning of a new

sort of front in viral surveillance we'll keep up because we see how important it is >> few things in q1. the biggest part was the strength in the core business. i'll talk about some of the dynamics driving the strength in the core business. another thing that showed up in q1 was the demand from customers that are doing covid surveillance so talk about that a little bit as well. in terms of the core business what's playing out is we're seeing our customers both on the research side as well as on the clinical side go back to work and activities as you pointed out. their activity is back to in some cases ahead of where they were pre-pandemic. what's driving that are a few things first of all, patients are going back into the clinic so you're seeing expectant mothers doing more non-invasive testing. cancer patients going back in to find the right therapies for their cancer and seeing genetic disease patients going back in

to get diagnosed what's driving that demand is not people going back from the pandemic but over in last year in 2020 we did a lot of work with insurance companies to increase access through expanded reimbursement so in 2020 we saw increases in reimbursement for non-invasive prenatal testing, increase in reimbursements for genetic disease testing and increase in regimeimbursement f genetic testing. because there's increased access patients can get more testing that they need the other thing that's playing out is in q3 of last year we introduced some technology that lowered the cost of sequencing so now you see customers access a $600 genome and the reason why we continue to lower the cost of sequencing we believe as a

business by driving the cost of sequencing down we'll expand the market that's been true for the last 15 years. when we first got into sequencing 15 years ago the cost doing a genome for a customer was $150,000 with our first he is coherency fast forward 15 years later and we offer it for $600 over 99% cost reduction that we brought in >> reporter: i hate to interrupt you. i have to ask you about the grail situation, ftc challenging you there. illumina has become so dominant in this space of genome sequencing and providing tools you've been a targeted twice by ftc and youabandoned the pacific. grail is in the cross-hairs. they think you can raise prices on competitors because you control the market how do you respond >> we disagree if you look at our history our

business strategy is to drive price down and increase access to genome testing to patients. this is a very important test. there are about 10 million people a year that die of cancer every year 600,000 in the u.s. alone. the grail test is a break through test and first over time grail test identifies 50 types of cancers, 45 of which have no other screening and can identify them across stages we know if you identify cancers early you have a higher chance of survival. by doing this acquisition we can accelerate patient access to that test and also drive accelerated reimbursement and so the underserved communities especially will be able to get access to test more quickly. that will save tens of thousands of lives a year, we believe. it will also lower billions of dollars in health care costs from the health care system and by increasing reimbursement it's competitive because it benefits everybody not just grail authors the points we're looking

forward to making. >> reporter: all right francis desouza we look forward to watching it after the last i'm you're ready to come out fighting so thanks for joining us andrew, back to you. thanks, meg. coming up on the other side, inside some big deal news this morning. legendary sports card maker topps going public via spac. michael eisner will join us along with spac sponsor jason mudrick will be with us stju ahead. stay tune you're watching "squawk" on cnbc

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welcome back to "squawk" topps the company best known for its baseball cards going public via spac today the value is at $1.3 billion it's riding the popularity of efts topps is owned by former disney ceo michael eisner as part of this deal. the company will roll 100% of its equity into the new topps. joining us now first on cnbc is topps chairman wmichael eisner and joined by jason mudrick. i give a lot of spac deals a hard time because they are

companies that have no earnings and it's unclear whether they will ever have any this is a real company that's been around for a very, very long time. a very real company with real earnings so michael, tell us why you chose this spac route. >> well, first of all, thank you. good morning and, yes, we are a real company. i think mainly we took this route because it's limited distraction to management. a lot of flexibility we can guide our company through the process of growing through this spac. our private equity partner has to exit after 14 years for his clients. so between the speed, the higher quality of sponsors, the timing, seemed like the right thing for us to do at this time. >> and jason, on the other side of it, i'm sure you've had lots of opportunities to look at a

lot of different companies how did you land on topps? >> andrew, as you said, topps is an exceptional company there's really two things that differentiate this deal from a lot of other opportunities we looked at. this is a real company it's been around for 80 years. has a portfolio of iconic brands run by an exceptional management team and sponsored by an exceptional american executive in michael eisner. most importantly it did over 500 million in revenue last year and projected to grow over 20% this year you can underwrite an investment on topps based on historical and current performance and you don't need five year projections that look like a hockey stick to justify this valuation that's one two as a sponsor on this spac committing $100 million into the deal we looked at all the deals that were announced and we only found one other deal where the sponsor was committing that kind of investment so it's a real company and two a

sponsor that's willing to put their own money where their mouth is as well as michael rolling in his equity. >> michael, let's talk about the business, the collectibles business 55% of the business is the collectible card business, the classic traditional cardboard version. only about 6% of business right now is digital i want to talk about the opportunity for that but there's a huge part of the business, i don't know if you saw that, we talked about bazooka gum and bazooka joe. how do you see that shifting over time, that mix? >> well, we have two businesses. confection business that started with bazooka which is much great are than that. we're the largest candy company in front of walmart or target. and our sports and entertainment business is just booming

i bought the company because i thought it had a great consumer emotional appeal the way disney did when i went to disney. i went to the parks. i grew up, took my kids to the parks. everybody i talked to, topps cards and mothers threw the cards away in a box. put the cards in wheels of their tires. it's an emotional feeling. we bought it as an analog company with the goal of making it digital over the course of 14 years we owned it we're now 25% digital however, the digital is growing really fast. it's instant gratification instantly we upgrade at every turn the statistics. now with block chain we can participate in secondary market before we only participated where we put the analog cards out. now the cards, as you said the

cardboard cards are still extremely popular. we appeal to kids. digital cards are very popular we appeal to teenagers and young adults and block chain we figure will appeal tomb but what we did, when we decided to do this deal, we -- block chain had not exploded we've been playing in field of block chain in last year and a half but the explosion came after we made the decision we didn't make the decision for that reason. it's really not in our economics although we think it will be fantastic. so we don't have future licenses in our projection, we don't have block chain in our projection. we're running our company as a real company this is the icing on the cake, doing digital completely with the analog in place. we have strong earnings. great management team. i think we have a similar management team that i had in disney and you look around so many of the companies are return

by disney alumni i will say that we're very happy to have jason because now we have a real serious financial executive who helps us and all of the various things we need help with. >> michael, does this speak to -- >> by the way -- >> go ahead. >> the company today which is just ironic to me is exactly the same financial position that disney was in 1984 when i went there. to the dollar. now if we do a tenth as well as disan disney, i'll be very happy >> we talk about this as opportunity. do you also look at potential competition coming in to the marketplace to compete with you in ways they haven't been able to before? >> well there's always competition. but we have the relationship with, for instance, major league baseball or the bundesliga league of germany or with the

champions league all throughout europe we're growing internationally tremendously and the consumer wants to see players in their uniform of their exact team. they want to see the marks of mlb marks. if you put out an individual player without all of that, it doesn't have the veracity of a topps company. so i don't think the competition is going to hurt us. probably will only help us >> jason, real quick there's a page on the deck about the explosion of your, you call it an edible business which raised a question to me about and maybe the brand is too wholesome i don't know about where that business can ultimately go. >> you're talking about the confection business? >> it was referred to as the edibles business in deck so i raised the question about whether the confection business

could turn into an edible business >> it's not those kind of edibles. it is 35 part of the business and provides a steady stream of cash flow which is great for this business going forward. >> okay. >> jason we appreciate it. michael, i want you to re-issue the garbage pail kids. i still have some. that's where the value is. i know you're doing some of that stuff. >> yes we did three experiments they sold out in one day because we wanted to experiment with our own before we go with things like baseball or a big movie at the same time. >> all right michael, great to see you. give my best to eric and stacy great to see you guys. good luck. >> thanks, andrew. >> joe >> coming up, faang still has

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showing you the faang stocks this morning as you can see investors are worried about the growth of these companies or at least the stocks as interest rates rise. but to borrow a phrase reports maybe of the death of faang might have been greatly exaggerated. in fact facebook hit an all time yesterday. joining us to talk about whether anything can stop it, sara fisher, axios media reporter and rich greenfield. i wonder, rates may go up. but maybe the stock price, the multiple looks rich but the future of the underlying future of these companies still very, very positive. >> it's so positive. the reason being there's a positive outlook for digital advertising right now, especiallyite frankly the entire advertising market typely grows

at the same rate as the gdp. we're not in recession territory which the advertising market is expected to explode in next few years especially online. this bodes well for google and amazon the thing i'm looking to see though does that bubble burst when we start to hear a little bit more about apple's idfa privacy setting that should be coming out in the next few weeks. >> rich, would you call faang either at a stay-at-home or a re-opening group they do well no matter what? a little bit of advantage during the stay-at-home >> you got to like separate the stocks a little bit. first of all the macro trend right now is that the consumer behavior has fundamentally shifted. we were moving away from retail and buying things in store to buying online. the pandemic was just -- it literally just accelerated by several years this global

transition to buying online. that is a big boom to all of these companies. they are all benefiting from, you know, retail, you know, things that you want to buy. shifting that behavior to advertising online that's become a major business and a major catalyst for small businesses to big businesses all over the world helping facebook, helping google, helping pinterest all of these on the opening side of this two stocks that benefit the most from re-opening are the one where's they benefit from you being out and about and i say snapchat great example no doubt snapchat using the camera, being out and about will benefit from re-opening. twitter. because twitter is so much about events and things happening. the more things happen and aren't cancelled or delayed, movies to olympics, all of that is going to be good for twitter in terms of 2021 and beyond. on sara questions on sort of what apple is doing and tim cook

talked about it yesterday. it's not good for any of these companies. no doubt that at&t app tracking, transparency that's not good for any of these companies that said it's going to be a lot worse for small players and the open web make the big companies as much as it hurts for a period of time maybe a couple of quarter, it's going to make these companies far stronger in their first data will be a meaningful advantage versus the competitive sentence. i think the end takeaway google, facebook, snapchat these companies become stronger on the other side of this not weaker. >> sara, your don't see everybody finally saying you know what? not even taking my phone i'm going out. i'm going outside. i'm not going be on any type of electronic device for next three days when we re-open that's still not going to happen. >> no, i think people will lean into their phones just as much

companies that rely on people being out and about will soar. you'll recall about a year ago this time all of these big travel companies like expedia and trip adviser they yanked their ad spend off of google and google plummeted google will benefit enormously because you'll see people start to travel, use these apps that advertise on google. they will do very well also a new report out this morning about amazon doing really well. analysts think they have about $15 billion in ad spend last year they are going to the to don't rich's point to bring in all of those ecommerce advertising polls. they will continue to do well. people still will be into their phones your question are people going to sit at home in their living rooms and watching streaming tv. i don't think streaming will go away but i don't thing people will binge like they have been so it might affect netflix a little bit >> i might go out for a week and

go back in and watch something >> the big change has been, joe, if you look what consumers have done is then moving furthered and further away from linear tv. if you're looking for what is the big event that we've all been waiting we've all been waiting for, right the nfl made a big decision to move thursday night football over the amazon. and you look at all of the companies. peacock is going to be simulcasting, "sunday night football," paramount pluls is going to be simulcasting sunday afternoon football streaming is here to stay and it is replacing linear tv and that shift, now that even sports is getting into it. the traditional bundle and cord cutting, we're going to hit record levels of cord cutting in '21 and 22 and it is going to benefit the streaming companies. netflix is going to spend 17 1/2 billion on content this year. >> they will be able to film

ozark. another season they are going to be able to film these things that are going to want to make you not go out you forgot that. >> joe what is your favorite show on netflix? >> i change. i'm watching the english game right now. julian fellows it is awesome. really good. but i just finished watching a game about two elderly people. last tango and hall faction. i loved that.ifax. i loved that >> i'm watching call my agent which is a french show they put into the u.s. as well. >> call my agent i i've called him everything under the sun, that you can imagine. i i dwru too at some point thank you both none of it is suitable for tv. maybe cable. rich, thank you. sarah thank you. let's get to, what's the worst thing you ever called ari? sorkin maybe cramer has called him. let's get to cnbc headquarters jim "cramer. hey, 40,000 people in the baseball game and the middle

seats are occupied again we're making pro. >> yeah we are >> there is a world you can go out in i don't understand the cdc's view if everybody is vaccinated, crew and customers, what the heck why does the cdc not let them go and you can pack a casino. you can pack a baseball game i don't understand i think they are being arbitrary and capricious at the cdc and really discriminating. maybe they watched the hbo documentary. the diamond princess documentary which would make you feel like you shouldn't cruise i don't think it is fair i think frank del rio has dope everything you could want. and the cdc won't even engage. i do think there are parts of the government that make it seem if you get vaccinated it doesn't seem to matter i think that's wrong >> shipping these things around

the world. when we have so much we can try and just eradicate this thing. >> total agreement why not. ank you. >> thank you "squawk box" will be right back. to a world that must keep turning. the world can't stop, so neither can we. because the things we make, help make the world go round. they make it cleaner, healthier, and more connected. it's what we build that keeps things moving forward. so with every turn, we'll keep building a world that works.

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like you become an agent of innovation with invesco qqq >> it's been a phenomenal market really since the arrival of 2020 two things in the market the first this rotation into value, somewhat at the expense of growth and the second is the rise in rates. the 10 year treasury yield

from .91% to about 170 today and what that's done put pressure on parts of the corporate bond market, credit market but also pressure on what we are calling longer duration asset classes like technology, parts of healthcare. and also pressure on the bond sectors like rates and utilities. as we're looking towards the real reopening here in the summer months we're mindful of a couple things. one the value rotation has had a nice run already energy, financials and industrials are up 70%, 40 and 30% respectively since that december time period we're getting a little more selective here we're certainly lacking at where our highest conviction lies and we're mindful of perhaps some tail winds into second half of

year. >> mona we're going run into a hard break but any tech names? any names rotated out of that actually should be rotated back into >> couple of sectors we like that are supported by the biden administration clean energy first of all. they have had a tremendous rise and then tremendous fall we think it is a long-term secular winner and secondarily, an area like 5g part of the infrastructure package. part of broadband. certainly something we think coming to the forefront this year those are twosectors that are kind of growth think that we like. >> thank you.y that we like. >> thank you joe it's been a ball that does it for us today. >> that's a song happy to be stuck with you and tomorrow, becky is back. >> happy to be stuck with you. begot to go. join us tomorrow "squawk on the street" begins after this quick break kplp pictur

good tuesday morning welcome to "squawk on the street." i'm carl cant nia with skrim yarm and david faber will join us in a second stocks set to take a breather as the market gets set to focus on vaccine administration comments from p.o.t.u.s. and the economic growth as imf boosts forecast for europe and the u.s. bond market finds footing today too. ro been a begins with the continued archegos fall out. credit suisse taking a $5

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