try to, if you cast, not a good swing. and you got to pick your poison though fishing may be more relaxing, i'll tell you that much. final check on the market, the futures right now, starting to look down 23 points or so it was fun to see kyle he looks like you and matt, i think, becky, sort of, right? >> he does a good combo he is. i think he's cute. thank you to my better looking and dumber co-anchor we'll see you guys back here tomorrow right now it's time for "squawk on the street. please welcome our celebrity guest. the winner of the dupont award, he is a co-anchor of cnbc's "squawk on the street," from the faber report, here's david faber. >> the newest guest host for jeopardy, david faber, we can't wait to watch him in action this

summer good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber and jim cramer earnings are out in force today. airlines, at&t, chipotle, and more, jobless claims, 547,000 is a post-covid low our road map begins with the earnings deluge, dow, whirlpool, intel and snap after the bell. we will talk to the dow ceo and southwest ceo this hour. and credit suisse tapping investors for cash to shore up the archegos loss while it struggles to retain key employees. and president biden pledging to cut u.s. greenhouse gases 50% by the end of the decade the latest push to aggressively combat climate change. carl guys, the latest "jeopardy" today, let's talk about it when did you get the news, and what's the shooting schedule going to be like >> you know, you tape five shows in a day so it's a long day. i'll get a chance, i think, there will be some rehearsal as

well which is good because i will need every second of it, but you know, go out and do it, so i'll do it late next week but it won't air for quite some time and as you can see there, of course, i am, i'm sure many of the fans of the show, we know all of the other people but who in the world is that guy >> hardly. >> can't wait. looking forward to it so much. as you guys know, of course, i did compete, thankfully won, when i was on celebrity jeopardy, given questions and the great opportunity to host five shows and hopefully i will do okay. i've been watching a lot of tre be trebek, that guy, was he good, oh, man. so you know, just trying to learn from the master, watch every day, and hopefully won't disappoint but we got so much news to get to, i didn't expect that >> watching anderson cooper last night, and obviously watching, were you, are you just doing

comparisons? like stephanopoulos, i like the way he did it? >> i'm focused on trebek. >> dimaggio, you watch over and over, ted williams. >> it's amazing how many things you have to master for such a short amount of time but as a host of the show, even though the game is the show, you're constantly moving it forward, and there's you know, there's no zoning out there's no sitting there while jim cramer talks you can't do that. >> carl, i think it's one of the, maybe one of the highest risk jobs because people are just watching you, right is he good enough? >> i think it must be incredibly challenging, david, because you never see the show, the show always has momentum, right >> i mean you never see anyone really trip and i can't imagine the challenge of keeping everything straight and keeping the contestants in line. >> yeah, well you're going to see. now of course, i know they have an incredible staff there that makes everybodylook good regardless, because it is taped, thankfully, not live, like we

are, but you're right, carl, so hopefully, as bad as i might be, and i don't intend to be - >> stop it with the self-deprecation, i'm sure i will be made to look good. but i can't wait to do it and be back and report back and then we'll, i think it airs in early august. >> august is what the word is. >> yes >> meanwhile, we should be talking about a lot of other things >> i know, i'm just fascinated about it because the show is a national phenomenon i don't think my kids have ever missed a show. >> it is surprisie how many people have gotten in touch and it unites families, so many watch it every night. >> i want to start with archegos a story that i have followed so closely or at least tried to, the week ha it really hit, i was away but we're starting to see even more, credit suisse has been at the center of it, originally $4.7 billion loss, and last week you may recall when i wrote, after the close, i was reporting on those discovery trades that we didn't think, we

thought they were done and they weren't done and one of the key questions, well, are they losing even more money and yes, the answer is yes, they are. and they have dismissed any number of people who were trying to judge risk and failed to do so and looking at a stock price that has dropped down dramatically and it raises another question stock comp, my understanding is, from people close to the company, comes tomorrow, you know what your bonus is, but you're getting delivered the stock, tomorrow, well, that's not good, i mean you know, two months ago, when you learn how much you were going to get or three months was a lot higher and by the way, investment bank, well they performed quite well, m&a, capital markets, they've done very well in spacs, so those people are also being penalized and/or jim, and you know this, of course, having worked on wall street for many years, they are going to start, they're looking around, because the question for cs becomes how come because of the stock price fall and how do we incent them

and how do we pay more this year when we lost $5.5 billion. >> they wiped out so many years of investment banking earnings >> yes. >> this also, david, i'm surprised you're not pejorative. >> okay. >> frankly because this is one where every day we think it's over, capital raise, the capital raise, i mean -- >> another reason why there is pressure on the stock. >> cnbc europe did speak to credit suisse. >> really? >> the ceo >> we should take a listen to what he had to say about the quarter. >> a loss that we had in archegos was unacceptable and we had to take action in terms of management changes we are reducing our exposure in this business. we are reviewing our risk controls and systems in that area we reduce our exposure to the underlying positions now by over 97%. we have to take another roughly $600 million loss in the second quarter, but at the same time,

we have to take action also on the capital side, we have raised almost $2 billion, through two series of mandatory convertibles and we now have a ratio of 13%, if you take all of the measures into account that happened since the first of april >> yeah, all right, well, meanwhile, they didn't even have the systems in place to accurately understand exactly what was at risk in the moment the way clearly their competitors were able to it's somewhat shocking that that was not the case, jim. >> i have to tell you, i don't think that man that we just saw had any idea that this was going on in this matter. >> yeah. >> carl, it is important to note, archegos was incredibly profitable, for many of these prime brokers, i mean there's one, and i won't name the name, but, because i haven't confirmed it fully, but let's just say i'm

pretty confident that in one quarter, they have $140 million in fees. >> that's the biggest red flag that i ever heard. >> obviously the leverage he was taking at archegos. >> but that can give you a sense of why archegos was such an important client or why they would do business with them. $140 million for one of these client brokers just one in a quarter and now, of course, the end, they lost more than they made. and he had those relationships, so many different places but fascinating story, involving credit suisse. how will they keep these people in this environment and the larger, there is always that question of does the swiss government ever say, you know what, maybe you and ubs would make a good combination. >> right this guy, he's not -- well, this is staggering. and i don't know how anyone keeps their job.

>> anyone? there's a board. >> there is. >> carl, and then obviously, by the way, i don't know if you saw, discovery and viacom had good - >> i was going to say. >> i said that and then immediately on twitter people said are you kidding? no, no, no but the one thing that is certain is that there's always another part of this thing and i don't know whether we're done i don't know whether we're done. >> i mean i think we're there. >> with other firms. >> morgan stanley, goldman sachs, credit suisse, ubs, wells fargo, nomura and by the way, there are other firms and seven or eight relationship, and what he was doing, carl, was shocks, somewhat irrational and it seems to have worked for him in the past because he had an enormous family - >> did anyone have a vaccine against him -- >> jpmorgan? >> moderna. >> credit suisse, said just a

few months ago played aggressive on brokerage and spacs and equities and brings to mind the goldman note this morning. it comes screeching to a halt. we will talk to southwest gary kelly about the company's results and he believes the worst is behind us regarding weakness in travel demand. >> first do you's ceo jim fitterling, stay with us did you know that petco, is now a health and wellness company? their groomers work wonders for my confidence. i trust their vets, and i'mto they deliver high quality food the same day. i was outside digging, what'd i miss? just everything regarding our physical, social, and mental health. exciting. i'm gonna take a spin around the room. great idea.

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get ready for watchathon week, free starting april 27th. download the xfinity stream app to get ready to watch. dow is out with earnings beat on earnings and revenue estimates. joining us is jim fitterling, the chairman and ceo jim, always good to have you good morning to you. let's just start off on pricing, up 19%, year over year, and 14% sequentially, give me your sense as to whether that is going to continue, or where pricing is going to be perhaps six months from now. >> good morning, david it's great to be with you. and pricing is strong, because demand is strong right now and when you add in the fact that we lost some time to the winter storm and had some tight inventory levels and low

inventory levels in some of our chain, it feels like it's about a 13-month demand year, and about an 11-month supply year. so my outlook is, it's going to be tight this way, for the rest of the year. i said on our earnings call today, i don't think i have an opportunity to really build inventory until probably the end of the year. >> wow all right, now, i know you guys don't give specific earnings or ebitda guidance but you give sort of a range. and i just wonder, given that view of pricing, and the fact that it won't retreat, how should those who follow the company very closely, due to your ability to exceed what the analysts have out there right now, for ebitda targets? >> well, we delivered 2.3 billion of ebitda in the quarter. if you add back 400 million, for the loss that we saw from the winter storm and probably another 375 million from margin momentum, and just take off about 200, 250 million, for our

own expenses in the quarter, which are slightly up, this is turn-around season for us, you know, you get to a guidance number that's probably up about 600 million, sequentially. so we're expecting the second quarter to be our strongest quarter since we spun out. and i think, looking at the order log, and order book, and the backlog, i think it's going to continue through third quarter and the rest of the year. >> jim, jim cramer, i've given rave reviews about your call and obviously much has gone right. ebitda spin, 12 to 13, it sounds much better now, how much can this thing make? >> it can, jim, i think, as we came out of spend, we thought the bottom end was 6 billion, and last year you could see in a trough-a covid-induced troufb, we were at 5.6 billion, and we

stress tested that number and the top end we said 12 to 13 billion. additionally today what we talked about on the show is we have a series of incremental growth projects some of which started up in the first quarter which we think will add a billion to our core earnings through the cycle. and so they will start coming up, and we'll bring them on this year, and the next several years. we took cap ex for growth, we increased cap ex this year to 1.6 billion, our depreciation level is 2.2, i think we can steadily march it up to that level, and start to see these lower capital, higher return, faster payback projects add to our bottom line. i mentioned on the call, i think next year, you'll see probably 150 million plus out of those kind of investments. >> that's incredible you're very tough on yourself. many pages of benchmarks which you don't, you have work to do. >> we always have work to do,

that's why we do the benchmarking to determine what the gaps are and close those gaps and i think we got some sectors that still haven't recovered yet from covid and i'm optimistic you know, this rebound has been on the back of consumer spending, starting to be a recovery in automotive, even though it's not back to where it was pre-covid, it's moving in the right direction. residential construction has been on fire and of course, all of the associated electronics and durable goods has been on fire as well. but the industrial sectors just starting to fire, pmis in march, manufacturing pmis, a 15-year high, one of the strongest indicators from the industrial sector and i think as that comes on, as people get comfortable traveling again, as governments let us travel again, we're going to start to see another leg up on this. >> this is why we love the industrials so much right now, and the cycle, most important slide i think really, jim, was

the road map, near and long term growth on earth day here, stop the waste, one million metric tons of plastic to be collected. do you think that -- i know you have told me many times it's not really the united states, although we're not that great at recycling, where are we in terms of convincing whole countries that they have to recycle better >> i think we've made a lot of ground, and i think we're going to make ground in the united states as well i think there's some very positive things happening. you know, getting back into paris, i think gives the u.s. a seat at the table to influence policies but on plastics recycling, one of the biggest things that's happened is consumer demand is creating something that has not been there and if i went back five years ago, ten years ago, there wasn't demand for the product. and there was a lot of concern that recycled materials wouldn't be as clean or good, and mechanical recycling is the primary mode of recyclabling plastics because it is

inexpensive and takes low energy but advanced recycling opens up opportunities. and i have many that are recyclable and into feedstocks and can be used into materials for example food packaging and that opens up a huge demand and all of the consumer brands are looking for that demand to be filled. and i think the policies will move us in that direction. so we announced today, with mura technology, a new pilot that we'll try in the u.k., we've got several going on here, down in houston, we've got one with adam guard innovative which helps us supply materials for our post-consumer recycled products. and then we're working on partnerships like the city of baltimore, with one of our long-time partners to get accessibility to recycling to bring that raw material in so that we can meet that consumer demand. >> i mean obviously, we all want you to reach those goals, but it also helps if you can also do it efficiently and make money from

it, jim. will this become, if in fact, you kind of hit these targets, can it become a potential profit center for the company >> i do think it will. i think it will shift the way we do things. you have to take into account, you know, the returns are against what we pay for raw materials today, so i have to look at the cost of this, versus raw material, but i also have to look at what the market will pay for the recycling materials. historically we haven't seen a consumer willing to pay anything for it, but that's changing, pretty dramatically. and so i think you're going to see margin on both ends of this. and then the other thing, i think, we're moving toward, and we're a long way from having agreement on what it should be, is some market-related price on carbon >> right. >> that allows the financial markets to come in and make investments in this space, where they can get a return. and i do think there will be a return to be made, and if we leverage the financial markets, and get a market-related price on carbon, this thing will take

off. >> yes, and we get that a lot. real quick, jim, the infrastructure bill, we don't talk about it as much, i mean given the environment right now, but if that does get through, and we go get another $2 trillion, is that going to have an impact on pricing as well >> well, there's probably 680, to 800 billion of that spending that will create a demand pull for products that we make and sell so that will be helpful. i think the question is, on the pay-fors, whether it will make us competitive or not. we just had a big move on taxes that got us competitive with the rest of the. ecd so we got to be careful that we don't, at the same time we need to pay the infrastructure and i agree we need infrastructure investment, we have to make sure we don't make ourselves uncompetitive because our other stated objective is so increase manufacturing in the united states. >> jim, always appreciate taking time thank you. >> good to see you thank you. stay safe.

>> i will. carl plenty more still to come, guys airlines and travel rebounding amid the pandemic. southwest shares going to open within a buck or two of an all-time high. we'll talk to gary kelly in a cnbcn mont ia me

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throw big reports out of the airlines today american, southwest, and alaska. take a look at some of the gainers here we will be approaching some of the all-time highs as we said we'll talk to gary kelly of southwest aftheer t opening bell which we'll get in about five and a half minutes.

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geico. save even more when you bundle home and car insurance. we got a "mad dash" and to the opening bell, so many different companies to watch this morning you like chipotle here >> i think that maybe people

don't like chipotle enough it's been an amazing stock but when i see 17% same store sales. 21 million royalty members when they didn't have loyalty, a loyalty program two years ago. super bowl ad did matter they can handle a minimum wage boost. the stores themselves are making a fortune and digital pickup is the most profitable. what i hear about this one is basically, there's chipotle and then there's everybody else. and you know, they can talk about quesadillas, and it's meaningful, a super bowl ad is meaningful why? because they're so at the top of their game, and they know so much about their customers they're so in touch with their customers that i once again, i find their comps great, because they tell a story of love of a customer, but also of tremendous proficiency in technology. >> right so it's as much a technology story in some ways as it is --

>> exactly now you're starting to get people to come back to the stores and unit volume, maybe unit volumes of 3 million, maybe 2.5, but remember, they own the stores david, this is a company, jack hart's the cfo, on the conference call, they know every single, every single detail of what happens if they add a different, if they add a drink, they're not happy with the drinks right now, if they add something new to the menu and those of us who like cauliflower rice, it moves the needle. there was a lot of stuff in there, i don't want to compare apple and chipotle necessarily, but two run companies and people don't think they can move the needle they do. but there's a big company like apple, or a smaller company like chipotle, it's great to hear management issuing products that do change the earnings forecast. and that's what it should be about. and chipotle definitely is

there, katy huberty yesterday, with apple, people sneer, they say come on, nothing matters innovation matters in the case of a menu, loyalty matters. 21 million no loyalty program before. and carl, so many earnings to get to alone not to mention movers. >> yes, we're chipping away, guys, the opening bell at the nyse and the nasdaq, guys. as we try to, we avoided three days down yesterday, with the gains, but futures were a little bit sticky, we'll see where we get. jim, your point about day parts and margins and comps, chipotle, it's important because you got to get that lunchtime business back and that was a big lesson out of the coke earnings call, goldman is now tracking card swipes at the office, and they did cite a study yesterday that said that 80% of workers are expected back in the office by year end but we will see. >> look, i think it's happening. it's happening now we will speak to gary kelly and

he will talk about business travel and how that's coming back there's a lot of things that are happening that are surprising people on a positive note and here we are, carl, with good claims, and interest rates, they didn't do up and all of this great news interest rates aren't going up david, what's happening with the overall, is it just because our rates are so much higher than the rest of the world? because the news would be dow chemical or southwest or american, the news is so great. >> i mean pricing at dow, up 19% year over year, 14% sequentially >> jay powell did not, i hope, maybe you stepped out for a moment, but there's nothing transitory. >> and steve liesman reporting yesterday, and we have been following it closely at cnbc, the port issues, just because there are so much stuff, they just can't get to particular the chip shortage. >> the chip shortage is so bad

i mean again. >> and spreading you know, jim, it does raise that question. i don't know, do they know wha they're doing over there at the fed? >> let's give them a chance. you have to give the fed a chance because if you look at super storm yuri and the initial impact on dow and hen it came back down and it's okay, a lot of people put through price increases. union pacific, which the trust owns, at this point, that is port-related their numbers weren't that good. so not everybody is reeling in the dollars. >> no. let's get to some other movers this morning at&t shares, john stankey was a guest on "squawk box" this morning. a good view. >> sure was. >> he actually answers questions. always refreshing. i like when he was asked about the dividend, and he said you know what, if we get the stock price up >> i thought that was a jeopardy answer you should have put it in the form of a question

that's the best part of the interview. >> if we get our stock price up and then stop talking about the darn yield overall numbers of at&t, you don't usually see the stock move, we will keep an eye on it during the course of the day and i remember responses like this in the past and faded as the day goes on, but in contrast to verizon yesterday, they didn't lose any subscribers, they gained, the churn is 0.76, and they keep giving us the numbers on hbo, up 11 million subs, and that question of course, continues to be, about competition, we talked so much about it yesterday with the netflix numbers, and whether that is real, even though netflix says it's not a function of real competition. they want to make the point at at&t that hey, our arpu is significant, over 11 buck, real cash most of these relationships are direct with us with the consumer as opposed to using a wholesaler, so not the cable distribution partner and therefore, there's more money for them, and it's a direct relationship, which they like doing, bundling that they

continue to do with the wireless product, perhaps helping to reduce churn there so overall, and again, i'm not going to go any more than that bought they had stankey on "squawk box" and hopefully people listened to him, but a positive quarter from at&t, jim. >> carl, we have not had anything that is bad in the last 24 hours except for the stock market, and i find it somewhat cou counter-intuitive, because like lam research last night, which will basically say, we can't meet the demand, danaher today, can't meed meet the demand, dow, hard time to meet the demand and interest rates aren't going up so, i think the actual anomaly here is that stocks aren't roaring because i think they should be. there's a lot of good news. >> jim, i mean a couple of thoughts on that one is this goldman note this morning out of david kostin, that we're at peak economic growth and in his words since 1980, s&p returns are about half

of when data's accelerating and growing and positive, versus positive and decelerating. so there's the peak growth argument there's also what jpmorgan said earlier in the week and that is because there are more hiccups in europe, certainly more hiccups in india, and asia, and that that rolling effect of the reopening around the world is going to keep yields in check. even as the u.s. does pretty well by comparison >> well, look, the stocks that are really move rgt stocks that do well, when the economy is slowing which is always so difficult. the ones i look at, i look at crowdstrike, i look at ring central, i know it's not necessarily a company that's on people's mind but a great indicator, roku, i look at opta and they turn up immediately the moment people think slowdown it's just so hard. david, it's so hard to analyze. >> i know. let's move on to airline, always good to have kelly. >> this is a good example of what i'm talking about in terms of the company that is

demonstrating tremendous foresight and doing well it's the shares of southwest and they're justifiably up the airline is saying that user bookings continue to rise. they expect to break even or better by june therefore i'm putting it at the top of the cue of the airlines joining us, first on cnbc, southwest chairman and ceo gary kelly. gary, you really, do you make me feel terrific when i read what you're up to >> well, thanks, jim you know, gosh, it's been a horrendous 12, 14 months, and you know, thank goodness for a vaccine, thank goodness people are getting vaccinated, and thank goodness people are ready to get back to their lives, and move about the country, and we're ready to serve them. >> it's interesting you say that, you said something in your release that i felt really great. you were on a couple of quarters ago, and the last quarter, and you said there's nowhere to go this time you actually referenced the beach i mean people are going places, and it sounds like that the

pent-up demand is extraordinary. >> oh, yes, and of course, jim, the other thing that we have to do here is that we have to add the flights. so there was really an inflection point back in march, we had spring break coming, the bookings were coming on pretty strong, and overnight, we increased our flight activity mid march, i think it was march the 11th, by 50% we added a thousand flights a day. and so the seats were available. and fortunately, we're filling them up. and that's what they're doing. they're going to the beaches they're going to the mountains they're going to the desert. they're going to phoenix and i think, you know, hopefully slowly but surely, the coast, west coast, east coast, metropolitan areas, in particular, they'll start to open up more, and california is starting to open up more and we'll see hopefully a good response there as well >> all right i hate to bring up a fly in the ointment, but 32 maxes pulled, i mean at what point are you putting in really big orders at boeing and at what point do you

say, you know what, guy, i'm a huge customer, you have to execute. >> yes, this is obviously disappointing, it's a manufacturing issue, and it's fairly minor, fairly straightforward, but you know, we just can't afford to have any consequence here, so i think everybody is operating out of an abundance of caution we are working with boeing to get a service bulletin out, to get the faa to issue a directive, so we can get to work and get them back in the air so it's not a real complex lengthy issue at all and at least we're at the point right now where we still have surplus airplanes so there's no customer impact. but yeah, we need to obviously execute here, and have our supplier execute, that is, and get back to business and you know, we need the maxes, just in time, because business is starting to pick up >> gary, you've been so candid with us over the years about the max.

pre-covid, you came on the show and said we have one issue and it's the max you came on the show a little bit later on and said the board would look at possible fleet diversification. what was the argument to look beyond boeing as a supplier? did you ever get close or was it cost that really drove you away from that consideration? >> well, i think it was a number of things, but obviously, no company wants to be dependent upon a sole supplier, if you will, and at the same time, there are huge advantages and benefits by having one aircraft type, as the whole world knows by now, we're celebrating 50 years in two months, and we're famous for that. so as long as the product is the best in the world, and you have the best relationship, i think that that can work so we, i think we did our job, you know, we looked at that very, very carefully

and worked primarily with our current supplier, and reached the agreement that you all are aware of, back in march, which we've got the, we've got the best narrow body contract, i think, in the world, with the max 8, and now with the max 7, and we need to have two versions of the 737, a larger, 175-seater, and something more in the 150-seat range, and now, with that agreement, we have that solidified, and i think we're set. i think we're set for the next 10, 15, maybe even 20 years. very, very excited about that. so there are huge advantages on the cost side, on the operational side, and you know, being expert at one thing seems like it's safer to me, as well, so in any event, we're very pleased with where we are, and

boeing is a great company, and we have no doubt they will continue to do a great job for us >> gary, the industry as a whole has been dinged a couple of times because of the amount of cash they spent on buybacks over the decade, only to receive billions in aid when an emergency came along longer-term, has cash flow, cash burn more sustainable, will the industry look at buybacks differently, structurally differently? >> well, i can't really speak for the industry, as you know. i think as a proxy, i would certainly argue that buybacks need to be used very prudently i think southwest is a great example of where it worked we came in to the crisis in 2020 with the lowest debt to total capital that we've ever had in our history. so that's just evidence that when we did use buybacks, we used them appropriately. if you have high leverage, and

if you are impairing your ability to be able to grow, or withstand a crisis, then obviously it's not the appropriate use. so i think we're years away from when buybacks would make sense for us the first thing that we need to do is we recover and begin to stabilize and work our way back to prosperity here, is we need to pay down all of this debt that we have and as you saw in the release, we have more cash by far than we have debt outstanding, so we're in a splendid position to be able to do that. but that needs to be the top priority and it will be >> gary, the return of business travel has certainly got to be key to your future profitability. how do you view that you know, i'm even curious as to how you're trying to get a sense for when it will come back and how much of it will actually come back, both in the second half of this year, but even more importantly in terms of the really longer term trends.

>> well, again, i'll just repeat what we've been talking about over the past year some of these things are just not predictable. we can come up with theories and we can speculate, but in the end, i just don't know we talk to business customers, so we have some basis to give you an answer there, but in the end, you just don't know so all we can do is plan and we would be foolish to plan for a quick recovery of business travel so the good news about southwest airlines, and why i'm so excited, is we're a low cost business model, we're very well suited for this environment. we are certainly in a position where we can be prosperous and profitable with mostly leisure travel, which is very different than our business model leading up to us we're arguably the largest business travel airline in the country. just because we're, we carry more customers than anybody else so we'll be prepared for a long

recovery period. it could be two years. it could be five years which is more typical of a post-recession it could be ten years, for all i know because of all of the technology enablement that hurts business travel so we'll just have to see. in any event, we'll be doing everything that we can to promote it we've entered the global distribution systems, which will make managed travel much easier on southwest and i would expect that we'll see a significant increase in our mix of that travel but right now, you know, the first quarter, business travel was down still 80, 90%, you know, pick your point in time, so we have a long way to go on that front in the meantime, as jim pointed out, you know, we're looking forward hopefully to breaking even or even making a little profit in june, and that's with this current environment, that's with mostly leisure travel, and

that's what low costs do for us, it puts us in a position that we can offer low cost fares which the leisure component is mostly interested in and still be very successful. >> gary, you're a leader in many different initiatives in the industry where are you right now with your climate goals, trying to get the earth more clean >> well, it's a huge challenge for the industry, but it is an important objective for all of us as good stewards of our planet i'm proud of what southwest has done as an individual airline. we have reduced our carbon emissions per departure by 50% over the last 20 years and that's just pure self help that is us modernizing our fleet, with more fuel efficient engines. adding more fuel efficient operating procedures and again, i'm proud of that

we support the airlines for america goal of net zero carbon emissions in 2050. and that is our goal and we will strive to beat that. in order to do that, the government's going to have to play a huge role here, though, because that requires air traffic control modernization that actually reduces the time in air, and therefore, emissions. that is a huge opportunity we've been talking about that for years. secondly, we'll be very reliant upon the energy sector providing a supply of sustainable aviation fuels that will dramatically reduce carbon emissions. we can't do that as the airlines we've got to have the energy industry doing that. and the government's going to have to play a significant role there as well. and then finally, the whole opportunity of carbon capture and sequestration i think holds

great promise, and once again, the government will have to play a huge role there, and support r&d going forward. but it's an important issue. it's one that we're very committed to i'm the chairman for the next year 1/2 or so and we're all aligned as an industry in leading or beating those goals of carbon neutral 2050 >> gary, david and i were talking during the break and trying to figure out whether our country is really ready to do the right thing. with a president who is so committed to the environment, when you say the government has to play a huge role, is that realistic, given the fact that our country doesn't seem to have the will >> well, it's a complicated topic, jim, so you know, the united states can't do this by itself, either, you know so this is a world-wide initiative, or it won't happen. so all we can do is try to do our part we are definitely going to do the things that we control

we'll continue to modernize our fleet, the max plays a huge role in that, it's 15% more fuel efficient and that's 15% less carbon emissions and 40% quieter, so that is the future and it will take us a generation to turn our fleet over so that we're 100% max, if you will. and then hopefully by then, of course, there's the next generation still but that won't, that alone won't close the gap. so that's my point, is that it will take -- well, it's just a lot of the, the internet was the government, so there are many, many things that the government can do to help our society the miracle of having these vaccines available in a year, that's because of government research and investment that was going on for years and years, to put us in a position where that could happen so the same thing needs to happen here, in terms of at

least sustainable aviation fuels and certainly the air traffic control system, which the government owns and manages. so they're fully accountable on that. >> gary, you make me feel more optimistic than i did, because of people like you, who care much more than others, and you're a leader and if you get others to follow you, we can get somewhere. congratulations a good quarter gary kelly, always great to have you on the show. >> thanks, jim always great to be with you all. >> thank you carl, back to you. >> all right, guys, let's get to rick santelli, a check on the bond market this morning hey, rick. good morning, carl we had some pretty good data points out post-covid low levels, bringing people back, gets complicated considering some of the benefits out there, look at the two-day of 10s, yesterday's low yield was 1.55 doing a bit of work under that that gives you a clue how the day is going look at the year to date of 10s.

the right side, april, we are definitely in smaller ranges and definitely in a retracement mode how far we go down below 1.52 is what traders are thinking about. year to date, barclay's high yield spread, notice how it contracted really quite amazing actually under 300 in february haven't really done that since prior prior to the credit crisis. ecb had their meeting today, look at bund yields, dropping like a rock, so is the value of the euro their pep program, pandemic emergency purchase program, remains at elevated levels it's around 17 billion versus 14 1/2 billion euros and that continuation putting pressure on both of those markets. carl, jim, david, back to you. >> thank you very much when we come back, we'll check in with lance fritz of union pacific, talk about how they are managing the pandemic and the recovery, of course. don't go anywhere.

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markets paying close attention to supply constraints. dow is the biggest laggard on

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jim, you have got a packed show tonight. >> yes, in honor of my colleague, what is a block buster show, must be answered in the form of a question we've got nestle, we've go mattel which has been just an amazing story. and then intel, why not. >> i'll tune in for that. >> why not put the ceo of intel. that company is back and bigger than ever. that's the word, but we'll see thank you, carl, david >> can't wait to see the print tonight. jim, we'll see you at six. "mad money" of course with jim cramer the chop continues around 34 k wedo ido aut00 're back in a moment

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can help you build a complete financial plan. visit letsmakeaplan.org to find your cfp® professional. ♪♪ good thursday morning, welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan and david faber. earnings are out in full force, whether it's the airlines, dow, at&t, chipotle and lei out a few moments ago. leading economic indicators

for the month of march this is 62-year-old set of data points, 1 p.3% higher in its entire 62 years. the highest it's ever been was 3.1%, in may of 2020 you can see that these numbers are pretty lofty based on history. we do see a revision in the rear view mirror, for february. now, unfortunately comes down 1/10, which makes this numbers rated change that much stronger, and as far as housing, existing home sales are also hitting the wires right now for the month of march, and for that, we turn to diana, diana olick, please >> rick, existing home sales in march down 3.7% month to month to a seasonally adjusted annualized rate, that's the second straight month of drops and the slowest pace since august of 2020 the street was expecting 6.11 million units problem is not demand.

it's all about supply. inventory, 1.07 million homes for sale, down 28% year over year that pushes prices higher. median existing home price, $329,100, up 17.2%, year over year that is the all time highest price and also the fastest price appreciation on record maybe skewed a little because it's a median, and the reason is that more homes are selling on the upper end of the market. sales of million dollar plus homes up 108% year over year sales of homes priced between 150 and 250 k down 10% again, it is a very bifurcated and lean market. >> diana olick, thank you. 30 minutes into the trading session, here are the three big movers we are watching credit suisse, a loss this quarter following the archego

scandal. shares of at&t up 5% southwest airlines reporting a smaller than expected loss, forecasting a lower cash burn rate for the current quarter as conditions improve something i know you guys dug into in much more detail last hour, carl. >> yep, that's where we're going to kick it off southwest is the only major airline in the green, and gary kelly did discuss a number of things, the max, buy backs, and people's willingness to travel again. >> it's been a horrendous 12, 14 months, and you know, thank goodness for a vaccine thank goodness people are getting vaccinated and thank goodness people are ready to get back to hair lives and move around the country and we're ready to serve them. the seats are available, and fortunately we're filling them up that's what they're doing, going to the beaches, the mountains, the desert, going to phoenix, and i think, you know, hopefully slowly but surely, the coast, the west coast, east coast,

metropolitan areas in particular >> fill phil lebeau is with us help us wrap up the airlines and the broader picture and what it means for the recovery. >> i think what's interesting is southwest, no surprise that the company is projecting that it could be break even by june, given the fact that it has such a huge presence in the leisure market, and that's really the market that has been coming back it also has a huge business presence, but it doesn't have an international presence, and that's where you're still seeing the drag on american, united, delta, speaking of american. earlier today, we talked with ceo doug barker about where they are, following a first quarter where, yeah, they lost a couple of -- more than a billion dollars, and that was not a surprise the focus is what is the guidance for second quarter and the remainder of this year, and for q2 revenue is expected to be down 40%. the capacity, still lower than compared to a couple of years ago, down 20 to 25%. here's the important thing the booking trends are

improving, particularly as they look out over the next several months when it comes to corporate travel >> it feels like that's coming pretty quickly you know, as you talked to bankers and others, they're realizing that they're losing business if they don't have people on the road, so they're getting on the road. we'll get there. sometime probably in the back half of this year. >> reporter: so here are all the airlines reporting their earnings, with the exception of delta. delta did report last week you've got american, alaska, southwest, and speaking of alaska, they reported the earnings earlier today by the way, swung to positive cash flow in the month of march. we will be talking with ceo ben minicucci coming up later today on "the closing bell," and the focus is second quarter and the remainder of the year, as they like the rest of the industry is seeing the increase in demand on the leisure side now when can we see the rest of the business come together

do not miss that interview later today on the closing bell. guys, back to you. >> phil, really quick, gary kelly, we asked about the future for corporate travel, and i think he was a little cautious to make any profound announcements because we simply don't know what policies will be and how technology is going to affect companies willingness to spend on corporate would you argue that is sort of the consensus view or are some carriers actually trying to put a flag in the ground on a forecast >> nobody's putting a flag on the ground i think that's a consensus view, carl they will talk with one company, and that company will say, yeah, i think our industry is really going to start ramping up travel, let's say in the next three months then they will talk with another company in a different industry, and they'll get a much more cautious opinion of where things stand in terms of when that company will put people back out on the road. so i think everybody's a little cautious still to say exactly when they believe corporate travel will return they do say this, carl corporate travel comes back before international.

>> phil, gary kelly certainly didn't want to give any real prognostication saying it's simply too hard to know at this point. phil, thank you. phil lebeau for us i wanted to move to another story we have been following closely for weeks, the numbers from credit suisse, the company at the heart of losses that were suffered across weall street as result of the blow up of the family archegos in companies such as viacom and discovery, and suffered massive losses along with many of the prime brokers it did business with when those stocks reversed course and dropped substantially. credit suisse adding to what we already knew was 4.7 billion in losses, another 650 million in additional losses. many changes on the executive suite as well. brian chin, the ceo of the investment bank, laura warner, the chief risk and compliance

officer and on from there. one of the key questions for credit suisse as you look at a stock price, officer lows but nonetheless down substantially over the last few weeks is tomorrow i'm told employees there will actually get delivered to them, the stock and part of their stock base compensation it's a lot less than they thought it would be not that long ago one key question will be how do you retain key employees, while the prime brokerage had more than its share of problems, the investment bank overall in terms of m and a advisory, in terms of their ability to bring spacs to market, did quite well how do you retain employees. that will be a key for credit suisse, and of course as you might expect, i hear certainly there are quite a few resumes across wall street let's bring in leslie picker for more color as well something i mentioned early is just how profitable archegos was

profitable for many firms, why they would do so much business, extend ed leverage, but it represented a nice piece of profitable business until it didn't >> you're right, david, it's the classic tale of icharis. goldman sachs had its reservations about doing business with achegos, bill wong who managed it ran into issues with insider trading when he was in charge of tiger asia, and other banks didn't allow their prime brokerage to do business with them because they were concerned about risk levels, including bank of america, and j.p. morgan, for example, so when you look at kind of the postmortem of what happened with archegos, a big question is how do the risk management groups function in a way that they look

at the prospect of fees relative of the risk of doing business with this client this is a telltale sign of how to weigh the risks and rewards of aspects going forward. >> there's so much of the story we don't understand, what mr. wong was thinking through this he did have a history of playing big. i will tell you that, leslie, squeezing shorts in the past, suffering big losses, and also having enormous gains. few of us understood just how much he had in assets and not to mention what the leverage extended by these firms allowed him to control in terms of the size of these massive positions. >> yeah, the leverage, just unheard of across, you know, even the most risk -- highest risk appetite hedge funds out there. another key question i have is it looks like he took very concerted efforts to hide his positions through the total return swaps as you mentioned,

don't have to be disclosed they show up in 13 f filings, holdings by the banks, the morgan stanleys of the world, goldman sachs of the world you look at the largest holder of some of these big names that he held and it's largely the big banks because they were the ones creating these derivatives on his behalf he didn't have to file 13 fs disclosing what he held because he was a family office he really went to great lengths in order to make sure that his positions weren't disclosed. whether that was an overt kind of calculated move on his part or whether it was just a by-product of the way that he did business, remains to be seen but it's certainly note worthy and it's something that reports out last night say that the s.e.c. is really looking into in terms of transparency and disclosure and whether that could have really prevented what we saw here. >> and that's the other piece of the puzzle that we continue to watch, the regulatory fallout, whether it is the s.e.c. taking a closer look at the u.s. or

swing and a miss regulators saying they have open enforcement proceedings against credit suisse on top of by the way, the fallout last month. leslie picker, thank you. meantime, the white house hosting a virtual climate summit on this earth day, our diana olick has more diana. >> president biden opened the leaders summit on climate with the announcement of a new target for the u.s., a 50 to 52% reduction from 2005 levels of greenhouse gas pollution by 2030 this is nearly twice the pledge from president obama in twi2015 he called it a moral and economic imperative. >> the health of communities throughout the world depends on it the well being of our workers depends on it. the strength of our economies depends on it. countries that take decisive action now to create the industries of the future will be the ones that reap the economic benefits of the clean energy

boom that's coming >> china's president, apology jinping said the world has kpon b common but differentiated versions >> china will strike to peak carbon dioxide emissions before 2030 china has committed to move from carbon peak to carbon neutrality in a much shorter time span than what might take many developed countries. >> president biden focused on job creation as the foundation of climate action across all industries, agriculture, housing energy, transportation, construction he is instructing all members of his cabinet to be involved part of the path to achieving net zero emissions by 2050 carl >> a huge story, thank you diana olick. get a look at the road map this morning for the rest of the hour as we get ready for a break. we'll take a look at two

conflicting calls on tesla, coming out of citi and goldman. plus, it has been a busy week for real operators. union pacific ceo lance fritz is going to join us just after reporting quarterly results. and jeff ubben on the company's efg mission o, and a lot more "squawk on the street" coming "squawk on the street" coming right back actively managing investments in the world's public and private markets. outscale, with the resources to serve 1,500 clients in 52 countries. and outlast, with long-term conviction that looks beyond today's volatility. join the pursuit of outperformance at pgim. the investment management business of prudential.

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new plans to cut greenhouse gas emissions by 2030 in the administration's latest push to combat climate change. who better to join us today on earth day than jeff ubben, notable activist investor, founder of inclusive capital partners which jeff has been engaged in trying to get companies to act responsibly and creatively to address environmental challenges good to have you, and welcome this morning >> great to be here, david, i can't see you, but it's good to see you metaphorically. >> you can imagine me in your mind keep that, but focus on your answers, which, you know, my first question is you have been on the board for a little over a month at exxon mobil we had darren woods join us a couple of weeks ago, carbon capture, and storage technology. is it for real is it really going to become at ex exxon mobil a potential profit center >> can i do the energy

transition one on one. this is a lot of lerarnings from my work with exon, 2/3 is coming from non-eocd companies, the energy consumption is going to grow if you think about the demand pools, it's power transport or power generation, 37%, industrial 30. a transport 20, and then residential commercial, 13 and if you think about exxon's role, it's to do the hard stuff, and you cannot get to net zero without doing the hard stuff power gen, the transport piece, and the industrial piece, are really hard to electrify and you think about the existing energy system, it does everything really well except

the co 2, i mean, the ch bond has energy density, storability and movability like no other solution to use the existing infrastructure and capture the carbon, is probably the least expensive, quickest way to net zero now, the announcement that darren made this week in houston is essentially to reduce to zero the emissions of probably one of the largest median cities in the world, and by 2040, 100 million tons and it probably doesn't need much of a subsidy above 80 bucks to make it quote unquote economic to have a return attached to it i mean, that compares quickly with the ev today which is being su

subsidized at 450 a ton, and california at $200 a ton this is a really competitive net zero solution. >> right but, you know, jeff, it's interesting, you're implying, and i think darren obviously said the same, you put a price on carbon and a lot of these things become a lot more efficient and profitable quickly. ceo of dow was on our air earlier saying the same thing. and yet politically it doesn't seem to be sort of where the center of the focus on climate change is right now. >> yeah, that's the thing the politicians aren't talking about. i mean, to go 2 degrees or better, 450 parts per million of carbon in the atmosphere today pretty much enabled the green hydrogen economy you need a $200 carbon price to make it economic that's about 1.85 increase in g gasoline and 20 kilowatt in energy, which is pretty much 2 x in some cases on each. and so that's, you know, this is the thing, but to get going on

subsidies and credits to provide the scale to the supply chain is the key. i mean, renewable energy didn't compete with coal 15 years ago, but the itcs and the ptcs provided the increased economics that allowed the scale, and now beats coal straight up i mean, you need to, you know, develop storage better, but for energy versus capacity, it beats coal straight up this is what we need to do with carbon capture. >> all right let's talk a bit about, obviously you have only been on this board for a short amount of time you and i have talked on air and off as well, in terms of some of your long-term goals you know, i would assume you get the question, is this company for real, and is darren woods for real, in terms of their ambitions here or are they just talking a talk that at least will keep al bay perhaps some of

their critics for quite some time how do you answer that >> they have 20,000 scientists, they have been doing basic research by multiples. they have this team in new jersey they have the capabilities, the competencies and the reach like no other company to address these, you know, this massive problem. i mean, it's going to be difficult to do, you know, renewable diesel at scale when you move water laden waste around exxon is working on the things that decarbonize at scale, and carbon capture is a key technology the difference between green and blue hydrogen is a lot blue hydrogen starts to look economic with carbon capture at these lower carbon prices. >> from your perspective, are they spending enough there have been critics to say well it's still only 5% of your capex or something like that as an investor and board member, is it a sufficient amount of

capital that should be put toward this problem? >> what you're ignoring is the breakthrough technologies they're working on that we haven't talked about stay tuned on that the research to get that carbon price today well below $200 a ton, this stuff is coming, so -- and that's what the math, you know, what are they spending versus capex doesn't pick up >> yeah, are you going to buy more of the shares, just as an investor here, given i would assume this is a long-term board seat for you, i would anticipate, and we know your career as a so called activist, at least, obviously value act and now inclusive, are you going to buy more shares >> i am. i'm building this new business, and so i need to get some stuff done, but i'm, you know, i really believe that the return dynamics that exxon from here are spectacular. they are part of the solution, not part of the problem. carbon capture is a $2 trillion business

they're the leaders, 40% of it, globally in terms of market share. this is the technology that will get us there quickest, and net zero doesn't happen without it >> all right jeff, our viewers may have noticed, there's a truck behind you. it has nothing to do exxon mobil. it's nicola. i remember it well because of course it was my last in-person interview, you and trevor milton, company's founder, former ceo at the new york stock exchange, you were talking an awfully big game, man, and that thing went to 93 and came right back down. this week it was trading below 10 are you positive on the prospects of nicoli, i assume you are given the truck behind you, and if so, why. >> i was here yesterday at test track with the beta truck, and it was going 0 to 60 in 20 seconds with 25,000 pounds it was going 75 miles per hour around the curve, the chase car

couldn't really catch it it was actually spectacular. this is truck 7 behind me, and this is production intent, so we'll have trial production in olm, germany, in june, and we'll have trial production in the third quarter in coolidge, arizona, we did the joint venture, and here we are, fastest to market of an ev truck. you know, anybody's ever done. we're checking boxes, david. i mean, think about what we have announced, the market seems to not care all of a sudden, but think about the aps deal we got energy -- innovative energy prices, i guess, makes -- it's basically nuclear, that enables green hydrogen at a very low price. we've got this deal in europe with oge the pipes that deliver

hydrogen to our stations over time we've got the rates 360 is a dealer network in north america that sets us up for go to market and then today we announced a hydrogen partnership with ta >> yeah. >> so brick by brick, man, we're going to get there, just like you said. >> all right it's become a prove me stock in part, because a lot of what you were promising or what mr. milton was promising, didn't seem to pan out, at least in the near term. >> that's not true, though we're right on target for the truck. >> we all have visions of that truck being rolled down a hill i mean, you know, your endorsement was an important component of many people choosing to invest here, and obviously you're still a believer and you still believe you're going to hit the targets that were originally put out by the company? >> there's tremendous momentum here the team is head down. that's all i can say >> okay. so what's the next milestone we should be focused on, then, for

nikola >> trucks on the road. the fuel sub truck is going to be built on top of this so that's 2022, 2023, some unique hydrogen production capabilities, which we'll also be able to talk about in the future, not too distant future remember, the key here really is to have this greatest solution of hydrogen stations in the fuel cell truck, and of course the electric truck is something our customers want in addition so we're first to market with that, and then we'll be able to use both the battery and the hydrogen trucks on our infrastructure >> jeff, i can't think of a better person to have had on earth day, and thanks for the conversation this morning. look forward to obviously keeping track on both of these important stories. jeff ubben joining us.

>> thanks a lot david. take care. >> you too. watch tesla today getting two interesting calls. city a sell, goldman a buy we'll talk about it later this morning. morning. we'll be right back. ing for info on options trading, and look, it feels like i'm just wasting time. that's why td ameritrade designed a first-of-its-kind, personalized education center. oh. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter, so do its recommendations. so it's like my streaming service. well except now you're binge learning. see how you can become a smarter investor with a personalized education from td ameritrade. visit tdameritrade.com/learn ♪ we started with computers. we didn't stop at computers. we didn't stop at storage or cloud.

we kept going. working with our customers to enable the kind of technology that can guide an astronaut back to safety. and help make a hospital come to you, instead of you going to it. so when it comes to your business, you know we'll stop at nothing. did you know that petco, is now a health and wellness company? their groomers work wonders for my confidence. i trust their vets, and i'm known to have trust issues. they deliver high quality food the same day. i was outside digging, what'd i miss? just everything regarding our physical, social, and mental health. exciting. i'm gonna take a spin around the room. great idea. ♪ ♪ petco. the health and wellness company. that building you're trying to sell, - you should ten-x it. - ten-x it? ten-x is the world's largest online commercial real estate exchange.

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. it's now time for your etf spotlight, we're taking a look at consumer discretionary, xly, holding on to double digit games for the year one name in the group, chipotle hosting a 17% increase in comps, digital sales, more than doubling shares are slightly under pressure right now, down about 4/10 of a percent despite the news and the strong tape don't miss ceo brian nickel on "the exchange" later tayod, though in the meantime, we'll be right back stay with us ♪ ♪ (upbeat music) ♪ ♪ ♪ ♪ ♪ ♪

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welcome back, i'm rahel solomon, here's your cnbc covid update around 3 in 10 health care workers say they have recently

considered leaving their professions, blaming stress, burnout and the toll that the pandemic has taken on their mental health. this according a "washington post" kizer family foundation poll health officials in india have reported the world's biggest single day rise in covid cases with nearly 315,000 new infections the data comes as the country's capital, new delhi grapples with an oxygen shortage and intense ich care units at full capacity. >> organizers say they are considering a requirement that all attendees be vaccinated for quid pro quo t -- covid-19. the decision on whether to even hold the even this summer and the nevada desert is expected to be made by the end of this month. carl, of course, 50 to 80,000 people intend to go to that event. it would be quite a big event. >> yes indeed. i've never been. i've been dying to go. >> me too, carl, we should go

together >> yes >> when it's safe. >> we are watching the reopening trade this morning as businesses look to staff up many are finding it difficult to find workers greg washburn joins us this morning, ceo of mall and restaurant owner, charter holdings ray, it's great to have you back thanks for joiningus this morning. >> glad to be back i feel like it's dallas day, you've got american airlines, southwest airlines, at&t, and me, great to be here >> you're absolutely ight. i was just thinking, you know, ray, you walked us through some pretty dark days for retail last summer and fall. can you just talk about the degree to which the environment right now is the polar opposite of that if it's true >> yeah, i tell you, our business across our entire platform, business has never been better saleswise but hiring people has been the biggest problem we have. the customer is back we primarily operate in texas, which is 100% open as you know the customer is back in a big, big way.

the issue we have on employees is we're going against this unemployment and the $300 a week, which equates to about a little over $20 an hour tax free, and so people we have, like, dish washers, and bus boys that make 15 to $18 an hour, we can't get people for $20 an hour, free money they're getting from the government. every one of our restaurants is under staffed by 8 to 10 people and in our case that equates to about 500 people short we're looking to hire, and we're having a difficult time finding anyone: in addition, we're building some new restaurants and our construction cost haves skyrocketed. a big part of it is labor. i'm competing with the restaurant business and the construction business for the same price type employee, and costs have skyrocketed all the way across our supply chain. >> as a business owner, then, we know that the free money isn't going to last forever. is it your general view that you

wait it out, maybe make some adjustments with technology in the meantime knowing that that labor pool is going to free up later on >> well, october 1st is when it ends, and across, i don't know what happens, that inflationary bubble that hits, i'm not sure we have so many other expenses that have happened since last year, when i first went on your show a year ago. our takeout was about 10% of our business it's now 30% of our business well, the cost of that from packaging and, you know, silverware and bags and all of those things are huge and really pinch our margins. in addition to that, the supply chain to us has been incredibly pinched. consumer is not taking in a price increase we're primarily selling mexican food i can't raise prices very much at all what happens october 1st, i don't know something's got to give on this, whether it's supply chain or the employees, they start drifting back into work six, we have 500 unfilled

positions today that we could fill do i have those filled by october first? i don't know i doubt it, i think we're going to be in a -- and if we do fill it at that point, the unemployment rate right now is still very very low, like 6% texas is around 5 1/2. i don't know where we're going to find that employee. >> ray, it's morgan. i realize you're in this perfect storm right now talking about all of these different factors right now with your businesses i'm curious in general, the customer, the consumer piece of it, and the fact that you're seeing strong sales. we've got consumers that are armed with stimulus checks, pent up demand, et cetera, do you see that as a sugar high or something that's going to last longer term? >> the sugar high, the $1,400 that they got last year, that went to buy, you know, some people obviously needed it for rent, other things, a lot of it went, if you look at your furniture retailers, a lot of it went to people buying furniture and tvs. that's a sugar high. for our business, people wanted to go back out again our business is back higher than it was, you know, a year ago,

when it closed because people want to get back out i don't look at it as a sugar high i look at it as get back to normal, with margins, the severe pinch. i know you have the chipotle ceo coming on later. i would like to hear what they're thinking about labor pretty much everyone they employee is at 15 to $20 an hour across thousands of stores we're all competing for the same person the sugar high -- >> i was going to say, the set up this summer is going to be challenging. we look forward to having you back on. i'll talk more about it in the weeks to come. great to see you again thank you. >> thanks for having me on. still to come, union pacific ceo lance fritz will join us first on cnbc. before that, april is financial literacy month, and cnbc is committed to sharing messages from business and thought leaders about the importance of financial education. here's investor and entrepreneur, natalie molina nino

>> when this country set its sights on traveling to the moon, the education system was shifted to focus on science and technology this country today is facing a wealth and an income gap unlike anything we have seen in almost a century. it's time that we shift the educ educational system to include the financial education that the financial education that will get us to that moon shot. go aflac!!! what the heck, troy - that's not your kid! the aflac duck is just covering for sophie. same way he got me money to help cover her hospital bill when my health insurance didn't pay for all of it. but this isn't fair! that's exasaid! but then i learned health insurance isn't even supposed to cover everything. wait...for real? for real real. luckily i had aflac. aflac!!! get help with expenses health insurance doesn't cover. go aflac! !mm-hm! get to know us at aflac.com. some say this is my greatest challenge ever. but i've seen centuries of this. with a companion that powers a digital world,

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why techs reign may be far from over even if interest rates do tick up check out tradingnation.cnbc.com for that story "squawk on the street" will be right back

(vo) we live in a world of fees. airlines, hotels, food delivery, and especially car dealers all charge excessive, last-minute fees. when you want something badly enough, it feels like your only choice is to pay up. but what if you had a choice to take a stand instead? at carvana, we believe in treating you better. with zero hidden fees, you can drive off without feeling ripped off. that's what it means to live feelessly. we want to continue our coverage of that battle for kansas city southern, of course two bids for the railroad one, far in excess, at least economically at this point than the other, that being of course what we got this week from canadian national.

yesterday, canadian pacific after the close reported earnings and the conference call associated with it ceo keith grill was quite outspoke, some might say a little off the rails in his comments about the prospective deal between the company he thought he was in position to buy, and the potential for cp actually stepping in, given the far higher bid that they currently have let me share a few things he had to say it was interesting in the sense of what is their ability to speak. when it speaks to leverage, 4.6 is what i was speaking to. frankly, i don't believe that's the right value proposition for shareholders to put our balance sheet at risk, and he goes on to say, that's a hypothetical situation. in other words, going up in terms of their bid so they would have to lever up to such a high number probably not going to happen, he indicated, but he says that's not a real deal, that cp deal. as far as i'm concerned it's fantasy land my answer would be it's nothing that we're considering at all. kind of acknowledging in some

ways in fact they're unlikely to be able to compete in terms of the economics of it and focusing instead on the antitrust implications of the cp bid, much of what goes back to will they get permission to use a voting trust. few believe cp doesn't present more challenges than did you describe -- sorry, cn's deal, than the current deal in place with canadian pacific. it's so much higher and, clearly doesn't appear they're going to be able to compete they're going to try to make it seem unlike they'll get approval for the voting trust shareholders aren't going to get their money for years potenpotential and of course you wonder whether it would face an antitrust challenge and therefore as the board of ksu, you might say, no, we can't do this, and that seems to be where mr. is focused on his potential opposition or trying to paint it as a bridge

too far so to speak. although in some of his other correspondence, he used it as a regulatory train wreck you don't typically hear the ceo of a rail company use the words train wreck. >> there's a lot of puns right now that have just happened in the last 90 seconds. >> there have. we should, by the way, share the response from canadian national to this foray from canadian pacific. they said the claims are not intended to benefit kcs shareholders but advance cp's own interest and deprive kcs shareholders of the full value for their shares the battle continues it's an interesting one to follow >> yeah. i mean, there's going to be -- this is probably going to take a long time regardless in terms of the regulatory review, which i think is to be expected and the other piece is going to be the shippers, and curious to hear what folks like lance fritz from union pacific, some of those other railroads are going to have to say too. we're going to be speaking to him in a short while, and this is going to come up, carl. >> indeed, can't wait to hear

what lance has to say, always a great interview. and by the way, big show coming up on tech check later on at the top of the hour. including the ceo of sony pictures on the deal with disney, and steve ao gtikietng into the nft game. that begins at the top of the hour hour we're back in a minute no, buddy! only pay for what you need. ♪ liberty, liberty, liberty, liberty. ♪ did you know that petco, is now a health and wellness company? their groomers work wonders for my confidence. i trust their vets, and i'm known to have trust issues. they deliver high quality food the same day. i was outside digging, what'd i miss?

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welcome back, take a look at shares of union pacific down about 2% right now ed railroad giant reported revenue, but reaffirmed full year guidance: joining us now is join pacific ceo us. >> thanks for having me, morgan. a pleasure. >> i realize results were impacted by weather and also fuel in the last quarter honing in on your guidance and the fact you also basically raised your volume guidance to the higher end of the range, 6% now. walk us through what you anticipate this economic recovery from a rail standpoint to look like in the coming weeks and months >> the reason we strengthened or guidance high end of our range for margin improvement, seeing the economy strengthen dramatically and quickly already seen good ecommerce, good consumption by consumers.

but it's starting to be matched by some movement in the industrial economy, housing and construction looks good. we're starting -- we would see, i think, good plastics and industrial chemicals but for recovering from the winter weather event that hit texas and louisiana. and we're also encouraged by continued strange in grain and other markets. we're just starting to see it broaden across our book. >> pricing, looks like pricing exceeds inflation, what you talked about at least in the release. this, of course, on the heels of last week union pacific raising the surcharge on excess contract cargo. first time seen peak season fees instituted before summer talk us through that >> those peak season charges are all about domestic intermodal, and making sure we have the capacity to serve customers that are in our mcp program, which is a program where we guarantee them a certain amount of

capacity if they guarantee us a certain amount of rateable loads through the year with demand very, very strong right now, we just need to make sure that boxes are available for those mcp-committed customers. that's exactly wry we raised the surcharges strong for our domestic moldal. >> and the fact that, shifting gears, many folks didn't anticipate we would be at this point again, the fact we're now having this bidding war essentially between canadian pacific and canadian national for kansas city southern, what could potentially be a new wave of rail consolidation, how do you see it, and if we see a deal actually move forward what does it mean for your longer-term strategy >> talk briefly about the process. they have to put an application in for the merger to be approved, whether it's the cnkcs or kpncs to the transportation

safety board the commercial regulator stb. in their own words they've said the next class one merger will have to be evaluated for its impact on enhancing competition, better for customers and downstream impact in the industry the stb has sole authority figuring out regulation environment and remedies to mak that happen. that's retarded mergers in the class-one industry for the last couple of decades and yet to be see how they navigate that the big question in front of the stb now is should a waiver to those rules that was identified back in 2001 for the kcs continue to be applied we're a strong advocate it shouldn't be there are many other strong advocates it should not be that the stb needs to use and playing field in evaluating class-one

mergers inclusive of the kcs. >> i realize there are a lot of moving parts here. the process will probably take a little time. if we were to see a deal happen and you see a fully connected rail network from canada down to mexico, how does that impact your business with union pacific? how are you thinking about that? would there be the potential for you to consider and realize this is probably unrealistic, any sort of, i guess, m & a as well? >> so mexico's an important market for us, morgan. we have a split business with the two big railroads in mexico. the fxe and the kcsm that's the mexican part of the kcs. right now both railroads treat us pretty well at the border, and we use our u.s. franchise, which is the best in the sdry, to connect mexican business into the united states and vice versa. our concern is that whether it's the cp or cn buying the kcs

thatting retard those customers. to remedy that we go through the stb in this process to identify risks for customers and identify the potential remedies and get them secured through the process. so that's kind of what's on our mind right now in terms of are union pacific participating in class one mergers, historically we've always looked at the process, the stb will have to go through, in terms of enhancing competition, evaluating things that have to be better for customers, and looking at the long-term downstream impacts as being an opportunity for the stb to destroy long-term value in the industry through regulation nap would be through things like open access. and as a right now, we've always had that calculus over-weigh benefits of consolidation. that's a calculus we do all the tile this process will inform it and we're going to stay active and informed, all right.

lance fritz. thank you for joining us today ceo of union pacific >> thank you. as we head to break, i wanted to look at shares of nikola see there up almost 18%. moving a little of these on comments from inclusive capital. board member of the company and significant owner, although he sold shares at far higher levels, we should point out. don't forget, of course tshs was march of 2020 when he and trevor milton appeared on cnbc with me discussing prospects for that company and was certainly effusive and continues to be, but many now believe is much more of a show-me stock than one they're going to necessarily believe in alo tnghe way believe in alo tnghe way we'll be right back. keep your number and keep your phone -- we'll even pay it off! only at t-mobile. the leader in 5g.

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okay i know the other people, but who's that guy an opportunity to appear on the show, of course, as a contestant great. thankfully love that prep's a lot more difficult. a lot more every question you got to be ableto read it appropriately and -- every second of that game got to be focused for. >> looking forward to that. that does it for "squawk on the street." "techcheck" starts right now. ♪ good thursday morning. welcome to "techcheck. i'm carl quintanilla with jon fortt and deirdre bosa big show today big tech versus small. app makers say they are afraid of the power of google and apple in front of congress we'll discuss the fear index of the valley. plus, feud