google but very different reaction from the two stocks we'll return through all of the earnings movers straight ahead president biden is going to present this $1.8 trillion -- i thought it was 2.3 oh, wait, this is a different one, 1.8 trillion family plan. we'll show you what's in it and how it will impact your money. plus, interest rates likely on hold in the fed meeting inflation, got that ten-year, better be on the "stack. steve liesman is going to be here wednesday, april 28th, 2021. as "squawk box" begins right now. ♪ good morning, everybody.

welcome to "squawk box" here on cnbc i'm becky quick along with joe kernen and andrew ross sorkin. and u.s. equity futures this morning are relatively flat just like they were yesterday in fact, yesterday, the s&p settled less than a point below that record high that it hit on monday it's still sitting right around there now. it's indicated up about three points the dow yesterday was flat, too, up three points indicated down by 40. and the nasdaq indicated down by about 20 tonight after it closed by 0.3% yesterday. everybody is waiting to see what the fed does today, including the treasury market. if you want to take a look right now where the ten-year is yielding you'll see at this point at least it looks like it's yielding 1.64% at the high end of that very tight range it's been trading in recently as low as 1.55% up to 1.645% right now. again, the bond market is one place where you're watching to see what happens with the fed

later today. it's not the ten-year, joe, on the "squawk stack" which is where we're looking at it right now. but let's take a look at the "squawk stack" because we've seen things that have incredible inflation. if you're looking for signs of inflation it's the inputs. wti highest since april 20th, it's up once again wti trading at 63.11 from month to date, up 6.5%. year to date, up by 30%. you have seen big increases in wti but that is just the beginning of things. lumber at an intraday all-time high look at it sitting there unchanged at 1,420 per thousand board feet it's up 42 month to date and up 64% year to date soybeans we were talking about that highest level since october 2012 wheat, we haven't looked at in a while.

yesterday, its highest level since february 2013. we're keeping a close look on that copper highest since august 2011 and corn which we have talked about recently, yesterday, at its highest level of 2013. rounding this out, though, the "squawk stack" with ether, i know you guys have been following this ethereum jumped to that record high, the european investment bank is planning according to the reports to launch a digital bond sale on the ethereum blockchain network. you can see that over 2600 this morning. >> that's what i'm looking at now, the low on ethereum on coinbase, it doesn't support those coins -- you can buy that -- you can buy ethereum do you know what the low is, becky? do you want to talk inflation? >> what? >> i think this is the year, $176 >> wow, i know a couple months ago it was at $1200.

>> i mean, that would have been have a lot of money. soybeans, it's not beans in the teens. we're headed -- we might go for a two, a two-handle soybean theoretically. you know, i was thinking about, guys, we're going to talk a lot about microsoft -- we're going to switch gears in a second, andrew just the microsoft and google numbers or alphabet numbers are just staggering. this revenue at alphabet and for both companies the point is made that they have done so well during the pandemic, that they're delivering these unbelievable rates so, do they want to reopen do they really stay where they are because they benefited i think that's really the ultimate question. if they've done so well during the pandemic, why should we assume that there's not a slight slowdown in the momentum if we reopen >> oh, so, joe, i think actually for microsoft, it actually even gets better when we get into

some kind of real life hybrid life >> right >> because there's even more product to sale. >> it's a win-win. >> i don't think we're finished selling the products yet meaning there was a pull forward and now there's going to be all sorts of new stuff they're going to have to sell people and if everybody is stuck inside their house for the rest of their life there's not enough new product to sale. one man's opinion. >> it's better if you have the hybrid because you need the products for work and you need the products to work from home two of everything. >> i think you don't just assume that they've done so well, well, what happens if it ends? that is the point. they got up to here, they don't go back downhill they stay up here. >> i think it's possible there could be a pullback >> well, valuation >> on the valuation side, you could even maybe argue that even straight shot. well, look, they're offering decent guidance, too

so, i don't want to question it. but at some point, you know, maybe it's 12 months from now, maybe it's longer, you would think that some corporations that are in the enterprise space are going to say, okay, hang on. we don't have to build out all of the stuff the way we -- you know, for certain companies, looking at the capital costs, it's not really the capital costs, it's obviously subscription things but there are major changes with how people are doing business. why don't we big into the story. we have two of the biggest stock movers and microsoft on the move both reporting earnings. microsoft's biggest revenue growth since 2018. joining to us talk about both of those stocks and try to help figure this out is stephanie link, chief strategist at hightower and a cnbc contributor. steph, you could answer the question that joe just asked, do you think these companies are better off if everybody is stuck

at home? >> good morning. well, they're just two powerhouses, right alphabet, i'm just blown wei with those numbers because the stock was up 31% into the print. just look at these numbers surge up 30%, an 8% beat youtube up 50. cloud up 45. free cash flow, 50% beat i mean, the buyback is huge. so, i mean, this company is just doing so well. i think the stock is doing better in the after hours not only because the numbers were so good, but because this stock has really lagged over the last couple of years. >> right >> at the same time as it's lagged, they've increased their partners by five times they've increased they're sales force by three times and the operating leverage is enormous i was nervous that the operating leverage wouldn't come in as better -- as well as it did in the last couple of quarters because it was so impressive in the last couple quarters

upward margin 30% beats expectation. the numbers are crazy. microsoft is more expensive. microsoft saw a two percentage point decline in their cloud business but still really impressive azure at 46% >> right >> so, these are great companies but, you know, on margin, i think the alphabet number much better microsoft, high expectations, good numbers but i get why it's selling off. >> steph, i want to go back to alphabet for a second because i've always thought that youtube and i think it's been proven this past quarter, that youtube is a juggernaut in a way that's so often underestimated in terms of what it means not just in the industry but just pure revenue you look at the revenue number on youtube alone and you can make the argument that this -- from a revenue perspective, this looks like netflix or it's on its way to being netflix.

the question is is that just embedded in the price? should the stock be re-rated is there something else going on maybe you don't like the ad business as much as the subscription business. i don't know, that blew me away? >> yeah, no, across the board and you're spot-on focusing on youtube, too obviously those are the trends and they are benefitting from work from home and all of that stuff but, these are the trends, andrew this is what's happening we're in a massive change. a secular change so, they are benefitings, they're executing, digital advertising was so depressed last year. it's recovering. so this only gets better in my opinion. on the search side, let's just throw in travel, that hasn't really kicked back in, right so, you've got a lot of ways to win with this name you got stay-at-home youtube and but you got return to life and work with search and cloud is absolutely on fire.

again, it's not cheap. it's 30 times earnings but when you have these kind of growth numbers and the fact that the last two years the stock has lagged >> but let's -- >> -- i think it continues to work >> play mike icrosoft out for us because of the issue we were talking about, originally there was a pull-forward piece, right? >> yeah. >> pandemic happens, a lot of companies had to switch gears. they had to buy a lot of new product. they had to subscribe to cloud services and the like for microsoft. now a hybrid world of sorts. there's a new set of products and other things that companies have to buy and sign on to that's a grit subscription business people love to give a great multiple to a subscription business but is this is a sustainable business a sustainably growing business >> that's a good question, they had two times digitization in two oral three months' time.

i do think there's a pull forward. that's why stock is down -- stock is up 16% in the last month. look, commerce bookings is the best number, 35% in five years total revenue for this company, as big as it is, up 16% year over year. operating margins, 300 basis points yeah, does it pull forward probably, the stock is not cheap. rye don't own it i actually sold it i'm looking and if it gets back down a little more, i'm buying it they're doing all the right things this company has benefited from stay-at-home but also reopening. it's not cheap that's the problem at 34 times estimates so when you don't actually blow it away like they did last quarter and there's a couple of things to nitpick at sigh get it. >> steph, you said it dropped a little bit

what's a little bit? would you pick it up again >> i mean, if it falls -- down 5% in the next couple of days, i'm a buyer, absolutely. >> steph, good to see you, appreciate it. >> good to see you meantime, we're going to talk about another big issue today. this is going to be the headline, president biden delivering his first address to a joint session of congress this evening. releasing details for a $1.8 trillion spending package. and for working families paid for by the wealthy america's family plan is$1 trillion in spending including 200 billions for universal preschool. $109 billion for free community college and $220 billion for a national family leave program. the proposal also covers $800 billion in tax cuts making the larger earned income and dependent care credits permanent. and extending the bigger child

tax credit through 2025. the white house saying it can raise enough taxes from high-income households to fully pay for the package over the next 15 years. among the proposed changes, restoring the top individual income rate to 39.6% taxing capital gains as ordinary income for households making over $1 million. we talked a lot about this over the past couple of days. ending the stepped-up basis for gains over $1 million. and eliminating the like-kind exchange for real estate gains, over $500,000. the plan doesn't mention the cap on state and local tax from sam s.a.l.t. and i'm sure senator schumer and the states hit hardest will be making those phone calls guys, a lot we'll be hearing from tonight both on the spending front and the taxing front. >> yes and other things are happening

steve liesman is going to be here we keep saying that because we know about ratings we know about people anyway, steve liesman is going to tell us what keywords investors should listen for when jay powell talks this afternoon. it's like, people are half asleep as he's droning on and on, and there are keywords that you actually have to sit up and listen to, otherwise, you don't have to pay much attention and later this hour, dr. scott gottlieb weighs in on the new mask guidance from the cdc. if you're double vaccinated outside and no one is within three or four lemis from you you're actually allowed to take off one of your masks. "squawk box" will be right back.

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the fed wrapping up its two-day meeting. was that this week while no policy changes are expected, a lot of attention will be on inflation and the strengthening economy. steve liesman joins us now with more of what we should listen to when our ears should really perk up, steve. >> yeah, the drinking game the powell drinking game which i know you play at home when you go home and put your feet up on the coffee table and watch the fed press conference joe, no change in rates or asset purchases expected for today even for this year and a lot of

next and fed chair jay powell likely hopes the fed can escape the statement and the press conference and keep expectations exactly where they are the question is how long can they hold markets at bay and keep his committee behind unchanged fed policy here with expectation of the fed is survey, first not seeing until december 2022. taper expected to come in january. that's a reduction in its monthly asset purchases. that's one month earlier than the prior survey 65% of our respondents saying qe is not needed and not until the summer of 2022 most fed officials themselves don't forecast until after 2023. there's a difference with the market pricing for the late hikes. that's a year out and i'm not going to bother powell or the fed. there's growing criticism in the face of accelerating strong

growth and peter boockvar writes, pressure on the fed to start tapering qe which is doing nothing for it to intensify in the coming months. look for powell to ask about inflation and says that the fed sees it as transitory or temporary. with 8 million fewer jobs before the pandemic, the u.s. economy has a long way to go there's another buzz phrase, substantial further progress which powell said needs to trigger a change in policy. by summer that may be a tougher sale, joe. >> i remember in the past, steve, it's fun, it's fun. because one word can do it that makes it very interesting everybody -- you them, transitory, people believe that for some reason. we're all ready to buy into that, soybeans at 15 -- you know, all of these things but not to worry

not to worry even though you see these proposals coming both fiscally and then we know what we're doing monetary, it's just weird that we all believe it that it's really not to worry about it and even the bond market doesn't seem that worried. >> joe, am ial allowed to suggest something for the "squawk stack" >> yeah. >> i know i don't have that kind of status. >> you do. you do >> thank you the two-year note is something i get up every morning and i watch, and when i see the two-year note, it's up a few points they had a nasty auction earlier this week that rick santelli pointed out but that 18 or 17 handle on the two-year -- look at that, i did it! i did it, wow. >> okay, great >> very nimble >> nimble in the back, of course those guys in the back are amazing. but here's the thing, joe, when i see an 18 handle on the two-year it's definitely higher than it's been

but is it hard to see that the market is expecting much from the fed? or even much in terms of inflation with 18-handle on the two-year note which is supposed to be the daily average of funds rates over a two-year period powell has this market remarkably under control the idea of the debate we're having that the fed hike some time late next year or early 2023, is a pretty good sign of success. if you go back and remember what happened in the great financial crisis, that debate was much sooner it was like you having a 30 handle or 50 handle sometimes on the two-year note. so every time the fed kept saying we're on hold, the market was anticipating some rate hike six months down the road so, yeah, i think people have bought into this transitory issue. the question is when you see cpi prices and commodities go up th way they have been, can powell hold the line on that. >> it's just scary for me, steve, that we almost -- it almost seems like there are free

lunches. and that there's nothing to worry about no matter how much we spend if you could do that, moderate, if it really did work and deficits didn't matter, why wouldn't we pay for everyone, college -- heck, go to harvard we'll pay for that for four years. we'll do universal child care. we'll do everything. let's buy everyone a house let's do everything. but we're learning a lesson that could be painful here. or year at least being lulled into this idea that nothing really matters don't you worry about that >> i definitely do but if i could, i think you need to separate a little bit of the fiscal spending out there. the $1.9 trillion that biden did that was a sort of mmt thing that came in the face of pretty low aggregate demand potential to the economy what he's proposing to do, i think you can and i can debate, is it the right thing to do or

the wrong thing to do but he is proposing, more or less, to pay for it so he's taking things of the of the economy in taxation, adding corporate taxes to the wealthy and putting it back over here. that's not really a mmt exercise we can debate is it right or wrong for the economy? is it infrastructure or not infrastructure but he's trying to do it in a classic way, joe take from the economy here and give it back over there. >> assuming there's no adverse effects to gdp or -- >> no, no, i'm just saying -- right -- >> yeah, i know. and growth is factored into all of these assumptions that that will hold up and i don't think you can assume that's going to hold up. great piece, i thought in the journal today. lead editorial, steve. check it out it's like you're inheriting a pretty good situation here let's -- you know, you read the whole thing. and you want your turn -- you turn yourself into fdr

things are going well. you know, don't go nuts. i thought it was a pretty good editorial. you know, half the country is just so relieved that it's not the trump storm. but let's not -- just because we're not in those news cycles every week, doesn't mean that there isn't peril ahead if we go -- >> one last word, joe -- nice green tie. >> thank you i think this is lemon-lime i think these are little slices. i think they're lemon-lime slices >> i see you sold back the mantle of the green tie. >> i did do you have one on >> no. i think when we come back, deutsche bank explaining how it avoided massive losses from archegos capital we've got the details, next.

plus, where's the beef a popular site is getting rid of beef recipes and we will tell you why. "squawk box" will be right back.

so what do you love about your always pan? it's a kitchen magician. have you ever seen a pan cook three things at once?

welcome back, everybody. deutsche bank shares are higher this morning after the company reported its best quarterly profit in seven years. for the first quarter, they had a profit of $1.1 billion that was helped out by a strong performance by the investment banking division the bank said it avoided fallout from the collapse of archegos capital by liquidating its position quickly they were wary of archegos because the company had huge stocks which they invested in. check it out, that stock is up

by 8.25% today okay, popular cooking site, website, epicurious is abeef with the beef industry the editors say they won't publish new beef recipes and revealed they've been phasing them out for over a year in a new article, site runner, says the shift is about sustainability and not giving air time to one of the world's worst climate offenders. existing beef recipes will remain on the site well, that's big of them andrew >> all right even i can say that's crazy. crazy. >> why even i? why even i >> well, because -- >> i've given up, andrew i've given up. you see, i've given up you're going to have to take the mantle >> acknowledging that -- right when we come back --

>> you have chris hughes coming on i'm going to take a little walk. >> okay. >> i'm going to take a little walk and go get a bagel. because we're going to change the entire economical system john lock new nothing, adam smith knew nothing we got a whole new system of really smart 30 year olds are going to run the government and control everything >> this is going to be good. ohhmm. >> i think you should take that walk >> i'm going to. i'm going to >> right now right now? >> it's coming up, isn't it? >> when we return, president biden is set to make his pitch to congress for a new $1.9 trillion families plan we'll show you what's in it and how it could impact your money quick break, though, and a check on the s&p winners and losers.

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♪ president biden expected to lay out his economic agenda coming up. we'll put those words together -- eco-genda. that's tonight on capitol hill with a socially distanced congress joining me, ed, i heard steve posited that this is different, we're going to do spending but we're actually going to pay for it my entire life, i heard tax and spend. one party, just tax and spend, tax and spend. isn't this tax and spend on steroids, ed isn't this somehow unique? looks like tax and spend to me

>> so, joe, i think when you take a step back, what the president is going to propose tonight, in addition to what he's already proposed, that's $4 thrillian. how much is actually going to get spent, those are political decisions. how much gets paid for i think is the biggest political decision from a market perspective. and i did follow you conversation, i think what the market is seeing some of the real risk has been taken off in terms of spending $4 trillion without paying for any of that that seems to be removed that was an inflation concern at the beginning of the year. the flip side is some of these tax increases, we do view what is being proposed as an opening bid. our base case assumption is taxes are going to go up but are we going to get $4 trillion of new taxes? that seems pretty unlikely so the market reaction here is we might be in an okay position or maybe even a goldilocks position as we're looking at

these packages more spending is coming on key infrastructure and social infrastructure programs. but on the flip side, the pull from the economy, those changes in taxes might not necessarily be as onerous as originally feared >> it would be great to do everything that we want to do. and go ahead and tax for it. but, is raymond james doing any analysis on whether the increase in taxes would harm economic activity, corporate profits, gdp? as we all hear about the jobs that are going to be created net/net, does gdp go up or down, based on this, long term >> yeah, i think, joe, we have done some analysis it really does depend upon what ultimately gets into the package. when i talk to my contacts here in d.c., one of the big debates here, and we saw this, you know, first with biden selecting janet

yellen as treasury secretary it does seem that the biden administration's first and force most is focused on the economy one of the issues with democrats, they say why did we just spend 5 plus trillion dollars trying to defeat covid dealing with the fiscal issues related to covid and turn around a couple months later and take $4 trillion in terms of tax increases? so the general view here is if this was all implemented, yes there is a debate, and it really depends upon the individual, you know, provision. there is a kind of general sentiment among democrats that you're not going to see as much change, based upon who is getting taxed here that's a philosophical debate. but ultimately, we think that the biden administration congressional democrats, they are trying to create as hot as

an economy as possible for midterm elections next year and for the 2024 presidential elections. and so kind of our base-case assumption is a lot of what will be done here at least in the near to medium term is going to be gdp positive. >> we had also the discussion about in a -- if you could do this, without eventual payback, it would be great. so, okay, you went out to the presidential election, so that's four years so, all right, we run hot. we throw everything we got at it, run hot for the next presidential election. there's no hangover ever ed, there's never a day where we say well, it's 1973 again? and we're going to now have a volker moment that it just comes to a screeching halt and we realize, oh, my god, this doesn't work and we're going to have to go through a lot of pain and learn

a lot of these lessons all over again at the private sector where capital has treated best >> yeah, joe, you bring up good points but i think it's the economic debate, the market debate and political debate right now are divorced from each other. when i have conversations with folks in d.c. they recognize that we are for the first time since those volker days that late kind of presidency of jimmy carter not really concerned among either party over what we've seen over the number of last year -- understand the bush administration -- >> you work at raymond james you've got clients that are 100% invested that some day -- you can't just talk politically -- that's your job, right >> joe, my job is not to influence the debate my job is to tell you where the most likely outcome is going to rur. >> okay. i'll have to go to a sout or

something to find out where the implications for the bond -- >> no, i told what you the market implications are. and i tell you this, i think -- but i think that, you know, kind of what we're looking at here. i think an under told aspect of this this is the first element of the china policy of the biden administration as well when you look what the they're trying to do here, it is part of a sprint ahead and this is a big part of the competition that the united states and china is having and so, i think when we look at infrastructure, there is an honest debate to be had, as to what kind of is infrastructure we have a burgeoning change, you know, of what that debate looks like and what the biden administration and democrats are looking at this they're saying this is a once in a generation opportunity to do certain things and so from a market perspective, we have to look at that and say, are we going to

see these changes? who are going to be the beneficiaries of that? and i do see a lot of good changes here >> i heard you buy into social infrastructure which, just pick a different name -- call it what -- does that make a difference in what we used to call it for fdr or lbj? or when we had arguments in the past about it. now you call it social infrastructure >> no, i think what we're looking at this could be the third big expansion of the federal government over the last hundred years. >> with no market implications that's what i'm looking to you for. you've got to tell people whether that's good or bad that might be a problem, ed. just depends >> i think near to medium term, it is good we have to find out a little more how it's implemented before we know the long-term implications >> history hasn't told us anything about this.

all right, thank you >> thank you >> i'm going to call jeff sout we've got dr. scott gottlieb joining us with the latest vaccinations and new mask guidelines from the cdc. or can i happily say less mask guidelines we'll talk about it. you can watch us, or listen to us live anytime only the cnbc 'rba aerhi wee ckft ts.

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a special programming note for you. this saturday, berkshire hathaway is holding its annual shareholder meeting. it's not going to be like it used to be with 40,000 people in the stadium. this year, it's going to be a

virtual event but warren buffett and charlie munger will be together they'll be taking questions for four hours they'll be joins by ajit jain and greg abel. it's not too late to get your questions in, send them to berkshire questions @cnbc.com. i've been reading through those questions, we will get through as many as we possibly can that email is berkshire questions @cnbc.com. it's for this saturday's berkshire hathaway meeting up next, the cdc is releasing guidelines on masks. dr. scott gottlieb will weigh in and the earnings, the first since the archegos collapse. huge runoff, we'll get to talk to ceo david zaslav with all of this he'll be joining us with an exclusive interview. he'll have comments since that

frenzy in march. don't go anywhere. this is "squawk box" and you're watching cnbc.

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starting today, if you're fully vaccinated, and you're out outdoors, you need -- and not in a big crowd, you no longer need to wear a mask i want to be absolutely clear, if you're inclear, if you are in a crowd, a stadium or a conference or a concert, you still need to wear a mask even if you're outside >> that was president biden yesterday addressing the cdc's updated guidance for fully vaccinated americans these new rules say that those who have received their jab can now unmask outdoors in small gatherings joining us right now is dr. scott gottleib he's the former fda commissioner and cnbc contributor and he serves on the boards of pfizer and illumina scott, you talked with us earlier this week how you felt this was important, how you thought this needed to happen but did this go far enough is this enough incentive for

americans to go ahead if they haven't gotten vaccinated and say, yes, i'd like to sign up for this >> the guidance that cdc put out is a step in the right direction but it's relatively confusing. it's not clear we need simpler rules. we need to decide what our public health goal is. i think the public health goal should be to try to protect vulnerable settings, continue to focus on nursing homes, day care settings where small children are and try to prevent large outbreaks and super spreading events we're not going to be able to prevent a single introduction where a single person introduces it to a single individual. but in the back drop and more vulnerable americans being vaccinated, we need to lean forward. the challenge is we don't lift the restrictions with the same speed as we did put them in.

so what does that look like in practicality i think that looks like in v environments where the vaccination rates are high, cases are down, we have to be willing to lift the mask ordinances completely. you are seeing states, cities doing that and step out in front of the cdc i think the risk to cdc as an institution is that they lose relevancy, that people stop listening to them. this final point, this is a cautionary tail to businesses. if they are waiting for prescriptive guidances from the cdc, they ought to think twice and come forward and develop those guidelines if they wait for the cdc, it will end up like the guidelines that cdc put out to summer camps which is very byzantine and hard to follow. >> right if you're looking for some exact prescription, this is not it you know, i think we've all been feeling pretty good about things

for the most part in america as we've seen the vaccinations pick up, cases come down. then you look at oregon and there are a couple of counties there where they have the biggest cities and they're back at highest risk levels they're talking about the potential for the health care system being over run there. is this the type of thing we continue to see, areas where you do see a resurgence in this? how do you address it? >> look, i think there's going to be pockets of vulnerability there are places in the country where vaccination rates are lower where they don't have some public health risks in place and there are places where b.1.1.7 got into populations later and it's rolling through different populations on a different imetable there will be hot spots throughout the country it's a big, diverse nation on the whole, prevalence is declining and it will continue to decline as we enter into the warmer months so i think the country as a whole loves good.

i think there's going to be local hot spots and we need to address those with local measures guidance for the nation as a whole should be to give more flexibility to go out without some restrictions to try to control the peak of the epidemic >> totally different story when you look at the heartbreaking situation in india it's kind of unbelievable that they've had more than 300,000 case, new cases on a daily basis for more than 6 days right now what's the best case scenario? what's the worst case scenario they don't have any of the supplies they need to handle this >> the best case scenario, quite frankly, is this is the peak of the epidemic we're seeing india in the throes of the worse case. it's not clear they'll be able to detect that with their daily ascertainment because testing is going up against the backdrop of an accelerating amount they don't have stable testing the worst case scenario, they're

not through it, this is going to increase they're having distribution problems there are supply problems and there are problems getting vaccines distributed and medical supplies distributed they need to focus on that they need more population wide mitigation they were reluctant and slow to put that in place. the population wide measures work we need to be able to preserve them for when we have epidemic peaks. india is experiencing that that we need to reach for those measures. >> is it too late to do this with population measures at this point? i mean, you hear the stories and seeing pictures that are coming out from there can they actually put this in reverse at this point? >> they can. i mean, they can break off chains of transmission, you'll start to see that flow through in the next week or two. they are starting to do that, but it's been slow and patchy across the country i think they need more national level measures to be put into place.

>> what about the rest of the world, are they going to be able to help quickly enough >> it's tough now. i mean, you know, you see the united states trying to take steps to get more vaccine into the market you saw efforts in the last couple of days to get more oxygen and medical supplies into the market if their epidemic is starting to peak, hopefully we don't see hospitals fall if they're not all the way true this, getting supplies in now is going to help because they're probably 2, 3, 4 weeks away from seeing their epidemic peak if you look at sero prevalence, you have to believe they're somewhere close to peaking at this point because they were at 40% back in december and january. they've had a lot of infection between then and now you have to believe they're getting close to 60% or more in some of the largest cities they have vaccinated it. they had 1 dose of vaccine

not as effectively as the west they have been able to get that into arms. >> dr. gottleib, thanks for your time today always appreciate the update >> thanks a lot. coming up, a huge lineup still to come including a fed talk with rick rieder and richard fischer and david zaz love and chris hues. the futures as we head to break. down a little bit. the dow and the nasdaq and the s&p but 4 points you're watching "squawk box" on cnbc

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rick rieder will joan us with his take on inflation what jay powell's message will be earnings from boeing in 30 minutes. we'll bring you the numbers and the reaction david zaslav, the rise of the retail investor. the second hour of "squawk box" begins right now. good mornings. welcome back to "squawk box. got the u.s. equity futures to

show you at this hour. that looks like it would open. nasdaq off 12 points shares of alphabet are higher and reported a record profit in the first quarter. a different story on the other end, starbucks, shares are sliding as the coffee chain missed sales estimates for its latest quarter. steve liesman will bring us news analysis no policy changes expected

>> president biden set to address a joint session of congress tonight his big test will be to build public support for economic proposals. ylan mui joins us. >> reporter: good morning, joe president biden will officially unveil the american families plan tonight it's a $1.8 trillion package of spending and tax cuts aimed at working families and paid for by the wealthy. the president will frame this as an historic investment in the human capital of the country including $200 billion for universal preschool. 109 billion for two years of free community college and $225 billion for a national paid family leave program it also makes care tax credits permanent and extends child tax care credit through 2025 to offset the program they want to close loopholes in the tax

code, ramp up enforcement and raise taxes on the rich. they want to raise it to 39.6 and taxing capital gains as ordinary income for houses making over $1 million and those would be permanent and i asked when it would take effect. they said they would work with the legislature to make sure they don't game the system it sounds like making the tax changes retroactive is not off the table. back over to you. >> that sounds exactly like what they are hinting at, ylan. i guess the biggest question that comes from this is can they get all of the democrats on board? they don't need help from the republicans but we've heard from plenty of senators and representatives who have some qualms about this. what do you think? >> yeah. so i think that right now democrats are trying to keep the

focus on what they would do with the money and reach consensus around what the spending portion will be. they are loathe to get sort of dragged into this debate over tax hikes at this point in the game they need to figure out exactly what they're going to do before they figure out how they're going to raise the revenue to do it because one obviously influences the other right now i think you're going to hear a lot of focus around universal preschool, paid family leave, food nutrition support, some of those items and trying to build a consensus there and then after that we might hear what exactly might happen in terms of tax increases because that is going to be a much tougher political battle >> ylan, thank you good to see you. in the meantime, megacap earnings are rolling in. microsoft topping expectations and tonight it's apple's turn. josh lipton joins us with more on that front. good morning, josh.

>> becky, microsoft continued benefitting as people play, learn, and work from home. just reporting q3 earnings per share of $1.95 on revenue of 41.7 billion, both beating expectations as your revenue jumping 50%. services are increasing 34%. revenue guidance exceeding expectations but the stock did slip analysts say the bar was very high into the print and azure growth did justmiss the buy side whisper number. now all eyes do turn to apple which reports after the close. gene munster expecting the iphone revenue 461.2 billion, up 42% year over year they forecast solid iphone demand in china. expect a lot of attention on the iphone and mac now investors have to wonder what does growth look like as people start returning to school and the office it's eased the quarter and apple updates the capital return

program. morgan stanley expecting $60 billion buy back authorization increase and 10% annual dividend bump back to you. >> josh, before you go, i'm curious what you make of the whole privacy brouhaha between facebook and apple and whether you think it's actually meaningful >> i think it's very meaningful. i think it comes down to how two companies deal with data comes down to the business models i think because of apple's business model selling hardware, not advertising, it can afford to approach data collection and it can minimize the collection when it does collect it, it can a nnonomyze it. >> there's a lot of stuff coming out in the epic case and not just epic, it's epic versus apple. you're seeing emails from eddie q and other executives about why

they were doing certain things in terms of imessage not making an android version trying to lock people into the apple phone. how concerned do you think folks are inside apple that that's going to have any kind of impact on the case or even more broadly in terms of public policy? >> i think every apple investor and epic investor is watching the case you're going to have very high profile people, andrew, testifying on both sides you're going to have from apple people like tim cook, phil schiller and craig federegi and over at epic tim sweeney at the end of the day what's at issue is how much the app store is charging developers that's what's going to count that's what has to be decided on epic will decide on broad strokes and apple will say, listen, you signed a contract and you broke it and you're trying to pad your bottom line we'll wait and see what a judge has to say to that. >> josh, thank you always good to see you, get your

perspective on all of it our apple expert, josh lipton. gearing up for the fed decision. we'll hear from blackrock's rick rieder on what investors expect. different check on markets right now as squawk returns right after this

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i think the fed has innovated,

et cetera, but i think it's time, particularly liquidity in the front end of the curve the amount of cash sitting there is just too high right now >> why do you think the fed has been reluctant to cop to that at this point are they worried about what happened last time are they worried about the economic recovery that didn't take hold as quickly as we wanted >> so there's a couple of things look at the virus. look at variants in parts of the world. spending a bunch of time on india, japan, parts of canada, et cetera. there is concern we're not through to the end second part is are we at maximum employment it is fair to say, we've got more to go that is part of the economy that still has more to go however, what you're seeing if you were to reduce some of the liquidity in the system, you started to taper by the way, i believe you can still support long end interest rates through the quantitative

easing program but bringing down the amount that you're using on the front end and you're still seeing the growth of employment. the thing i think is extraordinary unemployment today is you're seeing job shortages in much of the country look at some of the earnings reports and you see whether it's in construction, whether restaurants are now reopening, hiring people is hard to do. that will continue and if they reduce the liquidity, it will have no denegrating impact i'm saying move from emergency conditions rightly so to something that is accommodative and with less liquidity that can create overheating. >> so you don't think these are transitory inflation rates that we've been looking at? it does get a little concerning when you start looking at lumber prices, other commodities like the grains i mean, there are some big price spikes that we've seen not only this month but over this year to

date. >> so i'm not -- i actually think the fed is pretty right in their interpretation of transitory inflation like you saw. look at copper, look at iron ore, look at lumber. as you said, parts of the energy dynamic. we're seeing an extraordinary reopening. inventories are drawing down capacity needs to be rebuilt i do think you're going to see price pressure look at some of the consumer products companies there is real price pressure i think a lot of that is going to get absorbed into margin and i think you'll see some higher levels of inflation. i think the disinflation we've seen over the past number of years is gone. i think the over heating is not so much in durable inflation, longer term inflation, i actually think the over heating is creating -- i see this every day in the financial markets you talk about spacs when i look at quality assets because there's not enough of them relative to liquidity, what happens is if you have quality

assets that get richer and richer and they're buying them at the wrong price that's where i think you can get some real overheating. >> so are you pulling back are you selling anything or are you staying away from things are you hoarding cash at this point? what's your strategy if you worry these assets are running up too high? >> so that's a great question. so, listen, first thing i think they're still going higher i still think there's up side. you have another 5 to 10% in equities this year however, you think how do you hedge that use interest rates to hedge it today i use way more cash than i've ever used to hedge that but i also use convexity i can run a risk oriented position with volatility i can use options. that becomes really exciting today. you can still run longer risk which i think is the right spot, particularly this liquidity and all of the money coming into the

system then we're trying to get yield into places like securitized assets i still think the markets are going up you look at some of these numbers, these earnings numbers are pretty unbelievable. i think that is going to continue you talk about huge companies reporting up 30% year on year growth off of massive top line revenue to start with. numbers are impressive i think the number is 86% of companies were early in it but have beaten on an earnings base. and then top line revenue beats are impressive i think continue to ride that still makes some sense it's quality assets, treasuries, agency mortgages, parts of the muni market i'm not that interested in today. >> rick, why do you think with the earnings being so strong and some of these unbelievable beats on both the bottom and top line, you still see a selloff in some of the stocks. check out microsoft today and we've seen that happen day after

day where companies not only meet expectations they smash through expectations and yet the stockstill pulls back? >> so it's a pretty incredible dynamic. i think there's a couple of things happening one, the conviction level is not that high. the liquidity that's sitting out there in pockets and being put into the system is high but actually liquidity when you go to transact on a given price at a given point in time, it's actually not that high today what's happening is the expectations, microsoft's incredible company and the expectations do get built up around some of these so you do see some significant tradeoffs then you see them retrace the next couple of days. one of the things we've been doing within our portfolio is the reversal strategies when things come off, trying to understand why when you build that sort of performance it's actually been pretty successful >> so, in other words, you would say buy a stock like microsoft today when you see a pull back of 2, 3, 4, 5% based on strong

earnings that the street is still disappointed by? >> not spend a lot of time on individual stocks. companies that are throwing year on year revenue growth of those sort of numbers that are in cloud, that are in ai, that have durable cash flow, i mean, their cash flow numbers, i was looking at them yesterday, the free cash flow dynamics, boy, i would -- that is a -- should be a core part of your portfolio for the long term. >> one final question for you, rick the idea of keeping a lot of cash on hand, that is astrateg that makes total sense i hear it when you're looking at all of these assets looking up, but then when inflation is the biggest concern anybody has on mind, cash is the worst place you can put your money do you have to be nimble with that >> great question. our interpretation is not to run high levels of cash for years but today if you can create enough income in your portfolio, don't sit in assets that will go

down in price, treasuries, when rates go higher, they have room to go. things like agency mortgages sit in more cash and then when you get these blips in the market, start to put that money into the markets and so we've been executing upon that you know, it doesn't -- cash doesn't cost you a lot of money today. with treasury rates where they are, what are you going to sit in the 2-year note at less than 20 basis points. why do that? function of just sitting on cash it ends up being great ballasts for your portfolio and allows you to be tactical when opportunities present themselves. >> that's smart and makes a lot of sense but you've got a lot of money. if anybody has cash and big piles of it, you have a lot of it probably explains why we're not seeing big pull backs in the markets. any time there's a slight pull back, people are looking for places to put the money. >> becky, it's hard. >> thank you >> it is, right. you don't want to keep it in

cash thanks, rick great to see you. >> thank you you too. >> guy's loaded. loaded coming up, dow component boeing set to report results the numbers and market reactions straight ahead, and then discovery ceo david zaslav on the launch of discovery plus investors might ask him about archegos which is an anna gram go search. time now for today's aflac trivia question. which company owns the world's largest building by volume the answer when cnbc's "squawk box" continues what a day of upsets. ha ha. jill is certainly upset with that unexpected bill from her back surgery. aflac! let's see that one more time. ♪ ♪ (bleep) (wincing) oooh, right in the wallet! ouch! aflac! aflac would have paid jill cash directly to help with expenses health insurance doesn't cover.

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now the answer to today's aflac trivia question. which company owns the world's largest building by volume the answer, boeing the everett factory in washington is 472 million cubic feet

saudi arabia's crown principles mohamed bin salman says the countries going to sell a 1% stake in aramco oil giant two, in his words, a leading global energy company made the statement on a saudi owned news channel. the prince did not name the company but said it was from a huge company they listed 1.5% of the shares on the local stock exchange raising $30 billion but the saudi government still owns more than 98% of the company and separately the prince said saudi arabia and the biden administration are more than 90% in agreement when it comes to oil interests. >> fascinating story fascinating. when we return, we're going to have boeing's results set to be released. the numbers, instant market

reaction as it happens after the break. then you don't want to miss this discovery ceo david zaslav will join us. the first time he's spoken since gamestop and we'll call it reddit mania that also involved his company, archegos and everything else. later, facebook co-founder chris hughes says the free market is dead yeah, he says it's dead. we're going to talk to him about that, taxes and so much more "squawk box" returns with all of iju aomt. get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision. with zero-commission online u.s. stock and etf trades. for smarter trading decisions, get decision tech from fidelity.

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let's get to -- i can't believe we haven't mentioned this was coming up do we want viewers or not? dom chu joins us with some market movers. go figure, dom. >> you know, joe, for those viewers and listeners out there on sirius xm radio they know this 7:30 period time is the market updates, market minutes

it's like you don't have to tease it 7:30ish. >> people start salivating a.m. like pavlov. >> just ring bells speaking of bells, what's going on with the overall moves. ahead of the opening bell, we are talking about moves that we see thematically play out. they continue that trend right now. energy is the real outperformer over the last one-year period. financials up 58%. consumer staples up 16 outperformers during that time span, that real outperformance in energy and financials coming over the course of the last six months, part of the reopening trade. one other place is the dow transportation index relative strength and momentum, it's a huge move higher over the course of the last year. up by nearly 80%

it's on pace right now this particular index and etf, 13 straight weeks of gains which is a record. a positive indicator of the economy. watch what's happening with the earnings movers pre-market garmin, brinker, stanley black & decker and general dynamics. they all came out with better than expected earnings reports these are some earnings movers in the premarket so far. >> stanley black & decker. i always liked that name a lot how did they come up with that, do you think >> a combination of stanley and black & decker. >> yeah. yeah what did that cost >> i don't know. >> six figures at least six figures we've got to go. thanks, dom. i love you, go you've got it.

becks. >> the quarterly results are out. phil lebeau has been looking through them >> reporter: becky, this is a loss of $1.53 a share. we don't have a finalize the estimate from the street but we do know this loss is going to be greater than what analysts were expecting. a loss of $1.53 a share. revenue better than expected at 15.21 billion. the street was expecting just over $15 billion there is one charge in here for $318 million tied in with a supplier, otherwise it's a relatively clean set of numbers from boeing. let me run down the numbers within the numbers core operating loss of $353 million. operating cash flow negative $3.4 billion free cash flow negative 3$3.7 billion. by the way, roughly in line with what most analysts were expecting. they end the quarter with $21.9 billion in cash and liquidity. the debt level, $63.6 billion

and so that is roughly in line with where they were at the end of the fourth quarter. no change in guidance and they're not announcing any changes in either the production rate or manpower don't forget, we're going to be talking with dave calhoun, ceo of boeing at 9 a.m. on "squawk on the street. do not want to miss what dave has to say not only about where the market is now but boeing's efforts to get back to positive cash flow which still remains the target for 2022. guys, back to you. >> phil, just looking through the comments from dave calhoun right now in the release that's out, just talking about how they look at the global pandemic continuing to challenge the overall market environment but they think 2021 is the key inflection point overall because of the vaccine rollouts continuing to take place pretty much an optimistic outlook that things are getting much, much better from here. >> the big question for dave is whether or not what you see in india, what you see in parts of europe and other parts of the

world where the pandemic is either flaring up or has just taken hold and will not relinquish its grip, is whether or not that pushes out the time line for when they expect long haul travel to increase. most believe it comes back by 23, 24, somewhere in that time fr frame. you need to see aircrafts start to reorder planes. does that get pushed out as the pandemic lingers on. one other thing, ask about china. that's what we're going to be doing. china has not placed an order from boeing in at least three years as far as i can remember you don't have an order and china's regulator has not yet approved the 737 max to fly again. that is obviously something that boeing needs to change or have changed, i should say, as quickly as possible. we'll be talking with dave calhoun about that as well >> yeah, probably out of boeing's control with that one that has more to do with the

united states and china and the back and forth that we've been dealing with for years on that one. >> but they pay the price, becky. they pay the price. >> they do. >> that is a huge market they need china. >> phil, thank you good to see you. >> reporter: you bet you, too >> andrew? thanks, becks. when we come back, discovery ceo david zaslav is going to be our guest. he'll be with us rig aerhe eak.htft t

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discovery just out with first quarter results highlighted by a surge in streaming subscribers. discovery plus service operating into the mid fall from a year ago about as much as analysts have expected. joining us in an exclusive interview, discovery ceo david zaslav always a pleasure to have you on the show >> joey, nice to see you. >> that's not a green -- is that a green screen are you back where are you? >> i'm back. i'm fully back i'm in the city. the city's alive it's exciting. >> awesome we can meet up theoretically. >> correct >> if we had the inclination we talked a lot of different metrics. last time you were on i remember we didn't have the final numbers on discovery plus. you sort of intimated where they were they were way ahead of planned can you bring us up to date exactly where that stands right

now? >> sure. well, we announced today that we have 15 million subscribers already. and that's 10 million subscribers since the end of last year. so we're on a great pace we're beginning to scale more importantly, people are spending on average about 3 million hours with the product the churn is the very low end of all of our competitors so we're finding -- we have a product that people really love. the ratings are great. in the app store we have a 4.9 rating with apple. the most important is we have a product people love and we're scaling. 10 million subscribers since the end of last year feels very good and we've got a really diverse set of program assets in this portfolio that we're bringing to people for the first time our library is as big as the netflix library. we have home, food, oprah,

science, crime the interesting thing is in the three hours a day people spend, they're spending about equal time with each of the different niches that we have. so it's just a very popular product right now in terms of usage and as a result of that we're developing a lot the product is commercial free in the u.s. for $6.99 but for $4.99 with four minutes of commercials, we're generating over $5 in arpu on each of those. on cable we get about $7 so now when someone buys our ad like product, we're making more. on the rest of our -- on our over all arpu is high or higher than cable we have a cable business generating huge free cash flow and growing, our share is growing outside the u.s. and our share is growing here and around the world in a good advertising

market the free cash flow, we spent almost $500 million introducing discovery plus and we still generated a couple hundred million in free cash flow. we've got a stable cash flow now we have a great next generation director in consumer product and we've just gotten started. we've only rolled out in italy, u.k., northern europe. we'll be rolling out in multiple countries in the next 18 months. you'll start to see the growth aggressively as we roll into new countries. >> david, let's -- there's a near term price option i want to talk about and a longer term that it's like the elephant in the room with all of those great results you just highlighted, you can see on the -- let's start with the archegos stuff you saw the news today $10 billion the total for when you add in uvs's latest estimate and namora's latest estimate

that's what we're talking about on the chart right there somehow -- and when you were watching it, you know, you're not going to question what's happening as a shareholder and a ceo. must have been like, what world am i living in discovery plus is great but i'm worth $80. we'll talk about the move down today. >> first, the success we've been able to have with discovery plus, the fact that it's scaling, the fact that we're able to drive our traditional business with huge free cash flow and take discovery plus around the world and that people like it, we did get a step up in the market and we expect that we'll continue to grow because we have meaningful growth coming and for the first time, we'll be talking about it this morning, in a while we're showing some very impressive growth numbers we'll be giving some guidance and a lot more detail about the

kind of growth that we're seeing but, look, in the end it's -- the market is perfect. when i got to discovery we were $8 and we took it to $88 and sometimes we felt like we were worth a lot more than the market was giving us credit for, sometimes we felt we were worth a lot less whether we're at $80 or $40, we're in there every day driving a sustainable growth company that's really differentiated our mission of being one of the leading global i.t. companies. you have disney, you have netflix and we're driving to be the third big global i.p. company and we've made some real success. with this archegos gray swan effect, black swan, really it -- the way that we look at it unfortunately i got to learn a lot more about swaps and exotic instruments than i ever wanted to know, but that's kind of a

lot of noise we're back at work and ultimately the stock is going to be where we deserve it to be, and that's going depend on us executing. >> let's go back we're back to a base level looking at it today at $40, $39. the u.s. advertising revenue decreased 4% and we saw what happened with alphabet in terms of how the shift in where advertising dollars were going you've got secular declines that all of cable is paying attention to is there -- is the macro environment and these factors that are somewhat out of your control, is that how you account for a little bit of a drop today in the stock, a 4% drop in u.s. advertising revenue? >> well, the down 4% was actually -- we generated that purposefully we would have been probably up double digits if we didn't take a huge amount of our inventory and use it on hg, food,

discovery, tlc, animal planet, id, oprah. we took inventory we would have normally sold and we were telling people about discovery plus because by its very nature the people that were watching our channels, they love spending time with us and so we were letting them know that we've got this great product with a huge amount of original content that's available to them and that's unique and is compelling so beginning this quarter you're going to see that we're going to show some very meaningful growth on the advertising side. in fact, joe, the advertising market is super hot. we're seeing now scatter pricing 50% above where our up front was last year and the up front is coming up beginning in about 2 weeks and the market has never been hotter. so we're seeing big price increases. we're not going to be using as much of our inventory to promote

our product. you're going to start to see -- and i think the whole industry the numbers for all of our industry is strong it's reinforcing the fact that we have a lot of digital revenue that's generating significant income very high cpms through discovery plus but traditional linear television is still hugely popular. our cpms, right now, as i said, are up 50% above the up front from what we can sell. we think this is going to be a fantastic quarter and we see this year as being very strong >> right all right, david super hot. i was going to describe that turtleneck jacket combo as super hot and then you took the words kind of right out of my mouth. >> i need a patch on the elbow and a pipe we were still smoking pipes when you and i first met, joey. >> we were smoking something,

zas. i didn't exhale. wait a minute. oh, no, i didn't inhale. i messed that up zaslav, david, it's good to see you. we will follow the progress of this really multi-faceted company that turned it into -- you know what i love i love crime why do i like crime? why does everyone like crime what's wrong with us i don't understand it. >> we all love it. >> we're like voyeurs. crime and sharks thanks. >> thanks, joey. >> forget that it's the home remodels that i like anyway, when we come back, facebook co-founder chris hughes on what he calls a paradigm shift and more support from public investment. so, why not your cloud? a hybrid cloud with ibm helps bring all your clouds together. that means you can access all your data, modernize without rebuilding, and help keep things both open and secure.

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you get all of this with x1. so go on, get really into your shows. you need a breath mint. xfinity. it's a way better way to watch. welcome back to "squawk box. the free market is dead so says chris hughes he writes that today's massive shifts towards public investment is the most profound realignment in the american political economy in four decades. the market depends on the state now to create prosperity chris hughes joins us and he's also of course the co-founder and co-chair of the economic security project it's good to see you it's a fascinating op ed it will be controversial in many circles. make the case and then maybe we can dive into some of the issues but effectively it appears you're saying you believe the market economy we've known is no

longer >> well, i think the key point is that americans pretty much across party, education level, geography are throwing out the idea that the market is forever free and they're adopting a new framework that recognizes that markets need to be structured, regulated, that we need to have public industry to create the prosperity that the country needs to see we see this after the great recession, after coronavirus pandemic, after realignment both on the right and now it seems on the left there is a consensus you let markets go, there's natural, beautiful, chaotic. this is work government steps in every time they come apart and what's more is when government doesn't invest, doesn't provide things like child care, infrastructure it holds growth back it's the biggest paradigm shift

we've seen in the better part of four decades and i think it's going to last in the american political discourse. >> i know there are viewers who are probably watching this right now saying this is an argument for socialism. this is an argument for statism, this is an argument for the u.s. turning into china what are you suggesting? >> i think that the -- listen, what i'm trying to do is describe the broad common sense in america, which i think believes that capitalism can work but that there are many varieties of capitalism. the way that we practice capitalism for the past four years has not worked for most people and that instead we need to have a capitalism where markets are managed where we have smart regulation, where we have public investment and macro economics. to be honest, a lot of people in finance, corporate leaders, they agree with this, too we see a realignment amongst

business leaders as well because there's a general sense that we have under invested in our economy for a very long time so this is fundamentally an argument for competitive market but the kind of competitive markets, they're fair that can create the prosperity that people want to see and we see it in public polling on the big picture stuff but also on small things like on antitrust, for instance. there's a new majority on the left and the right that says government's got to step in, not to penalize any kind of big company if we're doing something wrong, but to create a fair market in the first place so small businesses can floor rich. >> chris, how do you reconcile this view with the success, for example, of the company you co-founded, facebook, or the success of an amazon, which is -- i think it's inarguable to suggest -- take facebook out

inarguable to suggest amazon's creation and success -- there's lots of down sides of it too, but has -- i think we've proven during this crisis quite remarkable for our economy >> well, i think entrepreneurship is the backbone of the american economy and we need to create a world where we can have a lot more amazons. the problem is when you get the giants whether it's amazons or in other industries as well, agriculture, pharmaceuticals, elsewhere. the research shows as they grow larger, they stifle innovation our productivity rates have flat lined in the united states research and development is significantly lower than it's been historically. the rate of small business starts even before the pandemic began was at a historic low. what you have is a few of the giant companies that have gotten so large they are effectively

able to stifle competition i don't think anybody, at least most people i know are not antiinnovation, antientrepreneurship in fact, they're pro these things and they want to see more of it, which is why you need a level playing field. >> chris, are those two things at odds, meaning can you have an entrepreneurial society where you're, quote, managing the market and by the way, i agree with you in this respect, we've always managed the market one way or the other. you could argue that maybe the past couple of decades we've managed it less in certain ways than others, but the idea that we ever had a quote, unquote, free market across the board, i know it's a nice turn phrase, but we've never truly had that either. >> well, i mean, i agree it's a turn of phrase. it's an idea it's a myth that's sort of dominated the discourse. we've had the sec, ftc doing regulatory work, we've had public investment.

we've had a million different ways that we've been designing the market even if we've been telling ourselves a different story. to go back toyour question, no only don't i think they're at odds, i think to actually have a country where we have significant entrepreneurship you have to have meaningful education so that people are ready to go, you've got to have enough people who are not living in poverty or can barely make ends meet that they can even thing about scraping together the funds to create a small business, and then you've got to have a world where amazon and other big companies can't target them and under price them in the marketplaces you know, so i think the way to create the kind of country that we want is to structure the market that rewards that kind of entrepreneurship and to be honest with ourselves that we need to do it. >> but the truth is, and here's the complicated part in my mind, you look at the way we've done it over the years. you look at the successes, especially in the business world, the entrepreneurs that have had great success, the innovation that's come out of the united states and you look

at that and you look relative to virtually every other country in the world and you've got to say to yourself, something right is happening here having said that, i know we can compare the u.s. to other countries in other respects especially when it comes to inequality or something like that at some point is there a place in the middle that captures the best parts of a quote, unquote free market economy even if it isn't as we discussed, free market >> yeah. i mean, there's no question america is an exceptionalist, the greatest country on the planet we are creative and we are determined at the same time, you know, you can look back and sort of -- and not consider the kind of factual, how much more innovation could we have had how much more creativity how many more small businesses could have grown larger over the past few years you can talk about it in anecdote or economic data.

productivity shows it's been stifled. i think we can do better and i think most americans are adopting the same paradigm to think about the future. >> the great counter factual chris, it is a provocative piece worth reading and considering whether you agree or disagree. we appreciate seeing you and hope to see you again. >> thanks for having me. >> coming up, we'll get you up to speed on the biggest earnings movers this morning. tell you what you need to noah head of the market open. plus, president biden to give his first address to joint session of congress. we'll talk what to expect with former adviser to president obama, valerie jarrett hits just keep on coming on "squawk box. 'rcongig bk.

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president biden prepping his next economic plan, and it's a big one. another nearly $2 trillion in spending and tax cuts to help american families. who's going to foot the bill we'll speak with former senior advisor to barack obama, valerie jarrett. a quarterly loss for boeing. revenue above street estimates we'll run down the plane maker's latest results for you plus, numbers from alphabet and microsoft. fed ahead. investors will dissect every and each comment from jay powell this afternoon we'll tell you what to listen for as the final hour of "squawk box" begins right now.

good morning and welcome to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin equities gotten weaker in the last half hour or so now down 81 points on the dow jones. the nasdaq indicated down 24 s&p off less than a half a point. so s&p folding up pretty well. 10-year as treasuries have moved back above 1.6%. 1.636% lots of things going on, especially not just the big picture but also a lot of individual companies which are a big picture, the ones we're talking about anyway, becky. >> right. >> all like $2 trillion market cap companies, some of them, not all of them.

microsoft, apple. >> big, big companies. >> and boeing this morning another dow component. >> right right. >> in fact, let's get you caught up on some of those latest earnings reports, get you the numbers and what's happening take a look at google parent alphabet up pretty nicely in the premarket. alphabet reported record profit for the second consecutive quarter. they announced a $50 billion share buy back it was much better than the street was anticipating. it's up 5.1% big, big move. gain of $117 microsoft is heading the opposite direction in the pre-market trading despite the fact that the third quarter sales and profit both beat estimates. 19% annualized revenue growth for the quarter was the company's best performance since 2018 hard to argue with a lot of those results. people were quibbling over those things, oh, only 50% growth in azure in the cloud market. these are problems most companies would love to have that stock this morning down by

about 2.7% then check out pinterest it's down sharply after the company beat on both the top and bottom line estimates in the latest sets of results but investors are focusing on a slowdown in pinterest user growth that's been the big question of what will happen as people start to go back will they continue to use some of these things that they've used so much during the lockdown period that stock is off by almost 12% this morning andrew >> thanks, becky. we are watching three big stories at this hour impacting the markets and your money phil lebeau has boeing's latest quarterly results. steve liesman on the fed decision and mike santoli. let's kick things off with boeing, phil over to you, my friend. >> take a look at shares of boeing under a littlebit of pressure off 1% after posting a wider than expected loss for the first quarter. revenue came in a little bit better than expected at $15.2 billion. as you look at the numbers

within the numbers, there was a charge for $318 million tied in with a supplier. the core operating loss, $353 million. then you have the operating cash flow and the free cash flow. both negative. operating negative 3.4 billion, free cash flow 3.7 billion both relatively in line with what analysts were expecting the debt level $63.6 billion that debt level is essentially where they were at the end of the quarter. coming up at 9 a.m. talk about the third quarter. a lot of things going against boeing including the pandemic which is long haul travel and is

expected to continue that way at least for the foreseeable future we'll talk with dave about that. let's go over to steve liesman he has more on the fed decision coming up a little bit later today. steve, over to you >> reporter: hey, fill, thanks no change in assets whampt should investors watch the beginning of the pandemic. jay powell has pointed to the course of the virus. growth or government spending. the point in particular the inflation charge

>> it's coming down and surging in the fall and winter and that surge is something to take note of wait to see what happens in the fall before announcing a taper. now to mike santoli. >> not too unusual >> that's what's going on. it looked over heated and we haven't had a pull back. go sideways for a while and the market can reset that might be what's happening

the cyclical indicators are good the 10-year treasury this is a 6-month look what this was, obviously a huge selloff in bonds, surging yields into the end of the first quarter. the worst quarter for bonds in many, many years it was very lopsided positioning. you had global flows come back in and take advantage of those rates. this is a very textbook action in the yield we start to pull back to where it had its biggest acceleration. no changes in the overall trend. it held all of the key technical support levels now maybe it's about to lift again. want to take a look at the megacap. you mentioned reported earnings. against industrials. this goes back to the beginning of last year and you see obviously neck and neck. what's interesting here, megacap growth, this is a lot of the nasdaq 100 names nothing in the last five months. similarly in june. industrials had done nothing

both kind of maybe going up a little bit more in sync. it's less of an either/or market nobody says both are going to be surging together or necessarily going down together, but it's interesting how they've kind of had these little mini peaks, consolidations and then a reset higher, joe. >> yeah. you mentioned -- we had the ten year we have powell, obviously, speaking today, mike i want to harken back. i don't know if -- you weren't on the show that day you remember that whole tepper -- >> sure. >> forecast. they said several months yields will be well behaved for several months, therefore, i'm very bullish we have stayed at 1.6. not everyone knew that market's up a lot. we were at like 12.1 on the -- 12,100 on that friday when he said he was buying the nasdaq. >> yeah. >> so big gains since then, too. that all worked out. he said several months here's my question, mike reopening because it looks like

a vaccine. we know a lot more now than we did two months ago on the vaccine. spending wow. i mean, we've got everyone coming on saying they're going to run this economy hot. >> yeah. >> the fed we've got all of these things happening. is it now time, do you think, we resume the upward climb in yields and could that be a problem? >> there's a lot of things driving in that direction, joe i don't know about it being a problem. the market always has to make its peace with each new level of yields if it's happening for those good reasons probably can be handled at least by the overall market. yes, you have to see if growth stocks are going to be so sensitive the way they were back a couple of months ago that hasn't always been a grand law of nature that's always existed. if you go back to 2013, the taper tantrum, that was great times after that for the nasdaq. i don't think you have to worry about it being so sensitive. >> 2% could be the new 1.6% i

think, mike. >> or what 3% was years ago. >> once they adjust it just orderly, slow just not spiking that depends on the transitory that's the word i'm looking for, transitory got to put a lot of faith that they know what they're talking about inflation wise thank you, mike santoli. see you around becky? >> thanks, joe it has certainly been pretty slow and pretty steady so far. we'll see. when we come back, president biden delivers his first speech to congress tonight so what's his best pitch to sell infrastructure both physical and social we'll ask obama foundation president valerie jarrett as biden's 100th day in office approaches stay tuned, you're watching "squawk box" on cnbc we listen. like jack. he wanted a streamlined version he could access anywhere, no download necessary.

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which shows will you be getting into tonight? how about all of 'em.k netflix. cuz xfinity gets you really into your shows. when someone burns for someone who does not feel the same. oh, daphne. let's switch. from live tv to sports on the go. felix at the finish! you can even watch your dvr from anywhere. okay, that's just showing off. you get all of this with x1. so go on, get really into your shows. you need a breath mint. xfinity. it's a way better way to watch. this morning we're getting details of president biden's american family plan it complements more than 2 trillion dollar infrastructure program. it's made up of $1.8 trillion in

cuts wealthy people will be footing much of this bill over the next 15 years joining us to talk about the president's plans in the first 100 days in office, valerie jarrett. she, of course, is former senior adviser to president barack obama. she's also the author of "finding my voice, when the perfect plan crumbles the adventure begins." valerie, great to see you. thanks for being with us. >> thanks, becky pleasure to be with you too. >> as somebody who's been through this before from the inside of an administration, what do you think about these two plans the president has put forth? >> pretty historic, i would say. i think president biden met the moment we are at a historically challenging time in our nation's country. i think the american rescue plan did what it was supposed to do he was determined when he came into office to ensure that he was able to meet the need in terms of the vaccines. he committed to 100 million vaccines in his first 100 days

when he said that 100 million number i thought how on earth is he going to do is that he's doubled it to 200 million and counting he wanted to make sure we were able to help the economy, investing in small businesses, american families at risk of losing their homes or have lost their jobs or couldn't provide for their families he did that. then the step two as you mentioned is infrastructure, a broad and inclusive definition of infrastructure that meets the needs of the 21st century and he's made his proposal he's willing to work with republicans on that. tonight, of course, he will outline the american plan for families, american families plan as you mentioned, investing in our children, their education, their futures. so when you take the three together, what i think he's showing the american people is this commitment to focus on them and that is heartening and it's why i think he's enjoying so much support broadly across the

country. >> the two plans, the american families plan and the transportation infrastructure bill, those really include a lot of items on democrats wish list for a long time, decades and decades. it's easy to see how you can get the party to coalesce around the goals of the plan, but it gets a little trickier when you start talking about how to pay for it. i would guess that there are lots of democrats who are not comfortable with some of these asks in terms of how to pay for these things you're somebody who's on a number of boards and when you look at the suggestion we raise the corporate tax back to 28%, a 33% hike, is that something you feel comfortable with? >> i do. i think what president biden has said is i'm willing to look at other alternatives people should bring forth their best plan. what he's not willing to do is to put off for another decade what he considers to be really important investments for our

country. as you travel the world, it is clear our infrastructure is not keeping up that impedes business's ability to get their goods and services around the marketplace we have to focus not just on roads and bridges, kind of the 20th century infrastructure, but broadband and technology and making sure that we are providing for american families. that's infrastructure as well. so this is an opportunity that he intends to seize. you're right, it is complicated how we pay for it. what he does not want to do is put the burden on hard-working americans and ensure the people who are making under $400,000 a year do not pay additional taxes. but i look at this as an investment i think it's in business's interests to focus on what they will get in the return for that investment, and that is a better prepared work force, that is a work force that isn't worried about whether their children are being well taken care of, well educated work force and one that can compete effectively in the

global marketplace >> one thing not in either of these plans is the lift on the s.a.l.t. cap tax it's something that people have raised concerns about. they feel like they are being unduly punished by having a cap on what they can deduct for the state and local taxes. how do you come down on that it's something that would make it much more difficult to pay for all of these other initiatives you just discussed if that cap is lifted. >> look, we have to look for ways of paying for this and this isn't a matter of punishment this is a matter of what are the best public policies that enable us to raise the money that we need to invest in our future and so, again, the president has said he's more than willing to listen he does not want to have any disproportionate impact on people who can't bear the responsibility, but he also does not want to just tread water with the status quo because if

we do that, we are falling behind and so, yes, every single tax has a policy behind it and as he has said, they're all negotiable he is not trying to punish anyone he's trying to fight on behalf of the american people and american businesses so we are more competitive >> hey, valvalerie, i've got two questions for you. there's no mention in the plan on the tax front, this is, to deal with carried interest, something that the biden administration has long talked about during the campaign and the like it does get taken care of effectively if, in fact, capital gains rate over $1 million does go up and match effectively ordinary income, but given that there's a view that the capital gains rate may not get there based on what the senate and congress may do, i'm curious whether you think that becomes a negotiating point later on in the conversation if, in fact, those rates are not the same

>> right well, i'm not going to get out ahead of these negotiations and try to predict what might be happening in the future. i think what's important is his willingness to negotiate his willingness to listen to people on both sides of the aisle, his willingness to engage both large and small businesses in this process and to look at it through the lens of what's going to help us over the long term i think forfar too long in washington we have seen congress basically not want to make hard decisions, not wanting to have any of the special interests annoyed with them and we have put off essential investment and so are there going to be some people who might be a little unhappy in the short term? inevitably whenever you talk about raising taxes that's going to happen, but the question is does this position the united states, our businesses, small, medium, and large to compete more effectively going forward and is it fair and are we putting a disproportionate burden on those

who can least afford it? i think that's the lens through which president biden is being guided and i think it's why he's enjoying so much popularity around the country, because people know he's focusing on them. >> valerie, on a related point though, one of the things that's unique about this moment is the administration is framing the tax increases as effectively pay fors as you said, you know, he says he doesn't want to, quote, unquote, punish people for making money the question i would have for you though is what happens -- and i imagine this is going to happen, the proposals to spend are going to come down because there's going to be pressure from the republicans and possibly even democrats and then the question is, is there going to be pressure on increasing tax rates in the same way? >> well, look, there are only so many ways that you can pay for this investment. you can raise taxes or you can add to our debt. or you can cut programs and i

think in this environment with so many americans depending on safety net, this is not the time to start thinking about cutting and further eroding their ability to stay afloat so there are only so many options available, and i think the magic sauce is figuring out how to get it just right and, again, it's a matter of figuring out how to get enough votes to pass something that will position us for the future. that's the lens. i'm not in the room where they're negotiating individual pay fors, as you call them, which is what they are but i do know they are looking at them through the lens of are we helping ourselves or hurting ourselves or are we helping american families or not that will guide the decision making >> valerie, i'd just like to ask you your perception of this administration in terms of how progressive it is, how moderate it is? there was a pretty big expectation that joe biden who's been in the senate and then

washington for a long time would be someone who was more moderate we've heard from alexandria ocasio-cortez that she and other progressives have been much more excited about this administration than they thought they were going to be. they thought they would be more conservative and elizabeth warren told us yesterday on the program basically the same thing. how do you view this administration and just where it comes down in terms of where on the spectrum >> well, you're looking for labels and i -- look, i know president biden very well and what he's interested in is how is he going to help that hard-working american family that is struggling right now, what's he going to do to incentive advise businesses to invest in america? i think one of his strengths is he's built a big tent where there is room for everyone, where people who are more moderate in the party feels that he is listening to their issues and those who are more progressive, he's listening to theirs really who he's listening to are the american people and what are

their struggles? and that's the lens. and i think when that guides your decision making, it is attractive to all spectrums, not just within the party. irm, you mentioned earlier this is a wish list for the democratic party no, it's actually a wish list for the american people. and if that's what guides you, it enables you to build a big tent made up of those not just within your party but the american people more broadly which is why i think he's enjoying so much more popularity in the polls >> valerie, thanks for your time today. >> you're welcome. tune in tonight. >> thank you andrew >> coming up, thank you, becky, when we return wall street gearing up for this afternoon rate decision from the federal reserve, and we'll ask richard fisher what to expect. don't miss a big ceo lineup on "squawk on the street. the gang has a huge number of

ceos including boeing, amd, starbucks and spotify. stay tuned, "squawk" continues after this

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welcome back to "squawk box. rick santelli with breaking news we need inventories. we know there's shortages in a variety of areas and sectors most sale inventories expected

to be up half of 1%. more than double that, almost triple up. 1.4% this is, indeed, a post covid surge and if we look at retail inventories, unfortunately it's a bit of a different scenario. it's down 1.4. this is the worst level in terms of drops in inventory on the retail side since, what, june? yeah, june of 2020 when it was down close to 3% now, granted, the wholesale that was strong, that's a preliminary number maybe it changed a bit while we're looking at the wire services, the advance read on trade balance hits changed came in at minus 90.6 billion these are huge numbers but how much attention should we pay at this point? we know that there's a lot of issues with supply chains and we also know that various covid economies outside the u.s., of course, are having issues with exporting and importing. these numbers have to get their

gps a bit better today is the second day of a fed meeting. that's what we're going to concentrate on, joe. any thoughts on the fed? i found it interesting that most stock drops don't expect to do anything until 2024. they really could have used some win decks on the crystalballs, i think. what do you think? >> i think it's the age old argument about what really constitutes inflation and what really causes it, what are the root causes? can we just write off commodity inflation because it's not wage price -- i don't know, rick. how you can call something transitory when it seems like we're doing everything to sort of resurrect inflation we're doing all that we can. now we haven't been able to. globally it's been tough for years. that doesn't mean we can never be on the cusp of something like the '70s again which not a lot of people remember there are a lot of people on the

show today that are describing the ragan years that were born in the '90s, rick. so it's amazing. it helps to have -- if you haven't studied history, it helps through it could it happen, rick? could we have 8% inflation >> you're talking about history. you're talking about history let's harken back about 8 years to the taper tantrum if i do recall, we've seen our current chairman say on multiple occasions, i'll give you plenty of advance notice on when we're going to taper or stop qe. if you tell traders, they will trade. it's as simple as that you cannot push the pin in the balloon and think the air is going to come out when it's as full and inflated as it is i think that the federal reserve needs to understand the way markets work a little bit better they always trade first and ask questions later. >> yeah. we just had valerie jarrett on

i want to go back to the $800 billion blowout stimulus that we used to cry about. >> there's 10 feet of new curb in my neighborhood because of that. >> no, i thought $800 billion -- and a lot of that was tax cuts i'm thinking ahead of obama was ragan. no -- >> our ex-mayor said it best our ex-mayor said it best. rahm said it best. never let a good crisis go to waste. it's a horrible thought but every country and every politician uses a crisis to get some of their wish list in addition to dealing with a crisis. >> at least everything is paid for. we have that going for us. coming up, everyone thinks they know what the fed is going to do this afternoon not much but that doesn't mean investors aren't treating today's rate announcement as serious as ever. former dallas fed president richard fisher is going to tell

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the fed wrapping up a two-day meeting. joining us right now is the former fed dallas president, richard fisher it's great to see you. y i want to talk about what we're seeing

the issue of inflation becky has been pointing out the price of corn, of oil, of everything we could obviously talk to -- bitcoin, nfts if this isn't inflation, what is >> well, we obviously have a booming demand, people going back to work, and we have supply side and we'll see supply side pressures. it's across the spectrum the real issue is whether or not it's a transitory thing or becomes embedded and repetitive. we've also heard, andrew, from various corporations, 3m just came out again with their cfo talking about the price pressures there under coca-cola, et cetera, et cetera so these commodity prices but also the supply side are being passed through the system. they're creating inflationary pressures. 10-year break-even is now back up over 240. so it's not clear yet how

dramatic it will be, a, and, b, whether or not it will be, quote, transitory or not we'll just have to wait and see. that's what the fed is going to have to watch very, very carefully. the trouble -- >> what camp are you in, richard? >> well, i'm a little concerned because it's a reaction function the fed has outlined they won't move until they're clearly understanding that inflation is going to be less intransitory, 2%, and the problem is when the fed acts, there's a lag between the time they act and it acts on the real economy. so we'll have to see they're going to have to anticipate somewhat more than they're articulating, not just wait because if they wait, then that proves to be nontransitory, they get worried, they tighten that could create a little bit excess of tightening or let inflation run a little bit longer this is a judgment call.

going to be tough on them. >> are you surprised where rates are right now? steve's been looking at the 10 year joe's been having these conversations with david tepper who seemingly so far has called this right >> wra i mean, we have the 10 year and the margin at 1.70 it's settled down at 1.50. now it's back up you have to remember, the fed owns 40% of treasury's 10-years an longer and rates are still risky. they're still buying a great deal the question, will the market determine that rate or will the fed determine that rate? does it have yield control or not? i think the market is more powerful than the fed here we'll have to see how it evaluates for further inflation as they try to achieve greater levels of unemployment unemployment is at 6% so they're not satisfied. >> joe has a question. joe's got a question for you, richard. >> yes, sir. >> because we go way back. i can read you like a book

we know -- >> except for on the pedigree. >> we know our faults and good things about each other and you are a -- i don't know what you are anymore. used to be a former texas d democrat but a small government, low regulation, low tax. if everything -- if biden -- if president biden gets everything he wants, people are calling this the most transformative administration in terms of big government since fdr and i think if he got everything he wanted, i don't know how it's going to go. i don't know if that's possible. are you concerned at the size and scope of the type of federal government that we're talking about right now? >> i don't think he'll get everything he wants. i would be concerned if he did i do think senator manchin from virginia as well as others including thoughtful others will

con strain what he's doing they're putting forward thoughtful alternatives and i understand his negotiating position you lay everything out while you can and you pare back what you need to. i'm wondering what we'll come up with i assume we'll come up with less than what he's proposed. >> done a lot already money wise >> yeah. and there's a lot of money floating around out there. this is the tough thing for the fed, how you begin to titrate this issue from the expansion of the balance sheet, when you signal it, how you do it 2013 was mentioned earlier that's a deep scar that anybody including me that was there feels and we'll just have to see. we don't want a gross market overreaction at a time where economic recovery is sensitive you like politics, joe it's going to take real compromise between the

republicans and democrats to come up with the right formula hopefully they can do it you probably know i'm on my way to kansas in a few minutes that legislature has just passed a law, came out of the lower house, ty master son passed it on to a democratic governor. it was signed so it's totally bipartisan it's called the technology enabled fiduciary national institutions act look it up, 2074 is the number this will make kansas the center for alternative asset management just like bermuda is an insurance center it took republicans and democrats to make it work. i hope we can do the same thing in the u.s. senate and lower houseworking with president biden. >> richard -- >> and -- and -- >> before you go to kansas, explain what you mean, what's going to happen here because i think that's actually

potentially as huge implications people are not going to have to go abroad. it's going to happen here in kansas >> yeah. i mean, more and more if you look at the system supporting alternative assets, the ability of using technology to enhance the efficiency of providing trust facilities, custodial facilities and liquidity to those markets, i'm on the board of a little company called beneficient. their leadership, brad hefner worked with the state legislature, kansasan. little bitty town. again, this is a state that has decided they want to become, let's say, what north dakota has become to the credit card industry or bermuda has become to the insurance industry. we're meeting today with political leaders. i want to pat them on the back

this is a good example of bipartisanship they're making it happen i'd like to see the country do the same thing. >> richard fisher, it's great to see you. kansas is the new cayman islands. >> new bermuda. >> new bermuda there you go, nice to see you, becky? >> thanks, guys. cnbc headquarters. jim cramer joins us right now. jim, i want to ask you to play the role of what's been happening with the fed right now. they've got two hats they've got to wear. one is to watch inflation, one is to make sure they really are keeping track of the jobs picture and i know the jobs picture is not resolved. got a lot of problems there. are you worried about what you see on the inflation front >> it's hard not to. the home builders. the home builders continue to expect that there's got to be

some peak in copper they can substitute for plastic in every industry people keep thinking there's got to be some peak, new and used cars, there's got to be some peak. there isn't. some of it could be policy you can change the canadian tariffs to be able to make it so lumber is better, but some of it is just incredible demand. some is because the chinese got in ahead of us no shortage of chips in china. each one you could possibly explain. steal not dumping anymore. good for american jobs there are a lot of policy issues that have caused the inflation and i don't think that the fed is going to be able to impact. in terms of wages, i still think, remember, the fed is very, very adamant or at least jay powell that not everybody is being -- taking part in this -- the great reopening and i think that he's very aware that the minorities have completely not

taken any. the rates are very different for minorities versus the classic majority i think he's thinking about that above all of the things i just talked about when you look at the quarters, i'm reading everybody's quarter, there isn't anybody that sees a peak yet they want to see it, but they don't see it. >> right am i right that you actually have the ceos of stanley black and decker, yum brands, ford and salesforce all crammed into one show tonight on "mad money"? >> yeah, we're going to break form and have jim farley in the a block. technical term for our industry. i just feel it's really important. >> no commercials tonight? >> i'd love to bust them ford is maybe the most important company because i think ford's in the midst of a major turn around for profit and obviously it's stuck in the semiconductor issue. the used car market is so great for them when it comes to your lease and turning back your car. and they're not losing money anymore. they're not going to try to lose

money in latin america which is what i always thought they were doing or europe. you're finally going to get a market with a new ceo who's all about making money not about being around the world which has been very much of a problem for ford i'm going to lead with ford. stanley black and decker, incredible leverage. yum, really crushing it. i have a lot of companies doing amazingly. this morning we have advanced micro and we've got some others that are kind of actually a little controversial boeing, we heard exactly what phil had to say about that the only start here is amd we have to figure out why starbucks is lagging spotify is very controversial. monthly average users people wanted but i still think their business model is very solid this is a very tough group the four this morning are tough. the four this evening are easy >> the other thing we haven't

talked about is microsoft. i did see your comments on that. i don't get it either. i'm not sure why the stock is down based on the numbers you saw. 50% growth in azure and that's your disappointing number? >> there's people who say sequentially it wasn't strong. some people wanted 48 number look, this is ridiculous that's the stock to buy this morning. there's just a knee jerk decline. the brokers want to get the sellers the best price they're going to try to, i think, knock it down at the end in order to say, hey, listen, we gave you a better price than the market closed at that was a brilliant quarter amy hood was amazing satya nadella was amazing. enough is enough their sellers there, they're short-timers they're to be ignored. it was a great quarter >> jim, looking forward to seeing you on "squawk on the street" and "mad money" tonight. >> exciting time thank you. >> it is "squawk box" will be right

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welcome back to "squawk box" this morning a little more than half an hour to the opening bell on wall street dom chu joins us with.

so biggest stocks on the move in the pre-market this morning. >> it has been a busy morning for earnings reports starting with shares of boeing lower by 1.5%. 400,000 shares of volume the aerospace and defense giant and dow component reported mixed results, smaller than expected loss on better than expected revenues jet deliveries as the airline looks to recover from the pandemic. general dynamics higher 1.5% thinner pre-market trading volume so far. best known for making abrams battle tanks, virginia nuclear submarines and gulf stream private jets reported better than expected profits and sales with year over year growth in sales in each of the major operating divisions. then we willing end on shares of spotify, 85,000 shares of volume, down 7%, after the streaming podcast and music company reported smaller than expected loss on better than expected revenues as monthly active users grew by 24% but if the current quarter

forecast that fell below some analyst estimates, that's why the shares are down 8% right now. back to you. >> dom, thanks. joining us is jim paulson, chief investment strategist, if i could sum up your thoughts, jim, the upside surprises keep coming for you, which puts a nice base underneath the market for maybe future advances. anything on the horizon policy-wise, or fed-wise that gives you pause? >> well, ultimately, joe, you know, the policies are going to turn more restrictive, but i still think that is later in the year and maybe even mostly a next year event. the fed and treasury officials are really slow here to back off the juice and i think they're going to continue to do that mostly that will probably become more over the next year issue. but i think right now, people are just having trouble catching up with the aggressive and

positive surprises that keep coming out on economic and earnings fronts almost every day. they raise their estimates but then those estimates get beat and every day, your estimates get surpassed, you have to raise your earnings estimate, you have to raise your target prices on the market, and it kind of continues to be an upward force for the stock market we'll eventually catch up to the reality but i think it's really been hard here because things have changed so quickly. >> you were early, an early hawk on inflation, and i used to needle you about that, and you were so early, and did you you, you did it for so long that you finally gave up. that's what i can figure and looking at the world today and what we're proposing and what we're seeing and i'm not hearing it from you. what happened? you got burned by being too early? so now, you're going to miss it?

maybe? >> well, maybe i'm not convinced either way that we're going to have run-away inflation or we're not going to have, joe i'm not so worried about a burst of inflation, which we are going to have, we're in the midst of that now, i'm more concerned about sustained inflation. and i think that's still a real risk, that could prematurely end this recovery, and its bull market, and i'm still on the fence on that, but i got to tell you, i'm leaning a little towards the view that we're going to get a burst of inflation and then maybe it calms down again you know, there's, most of the focus is on policy juice, and i get that, and policy has been overused and abused, maybe we have more aggressive policies than ever before in our history, and typically, that will heat the economy, and lead to potential overheat problems. but we also have a lot of disinflationary force out there, and a very big difference between today and the 1970s, we

have an aging and old demographic, we have a very slow - >> hey, hey, hey >> well, you're a great example, joe. i'm still sort of on the younger side but that's - >> you never know. >> in the 1970s, we had 2.5% labor growth, labor force growth, we only have 1% today. you know, i just don't think it's the same kind of situation. i kind of think we're going to have an improvement in technology, joe, coming up after the big tech run we've had in the last several years which will help. you know, this is a much more open economy today than what we had entering into the 1970s before, much more competitive economy today. back then it was led by automobiles which were sticker prices that went up every year, and today, it's led by technology, where sticker price goes down every year it's just a whole set of different forces that existed in the 1970s that really is what maybe was responsible for run-away inflation

we don't have that today >> all that stuff that we heard about. amazon driving prices down and being able to compare everything on the internet that you buy. all of those, and you know, technological advances are getting quicker and quicker. you might be right i believe you about the transitory nature before i'd believe maybe the policy makers so you might be on to something there, jim the only thing is, i just hope all our technological advances aren't made in social media. i mean what good is that doing for any of us? i guess advertising. but let's do some other cool stuff. let's fly around and stuff, you know or time travel or like on star trek i mean social media, that's what we've come to? that's going to be our big technological advance? that will be the end of us >> well, i hear what you're saying on that, it does seem, but it does lead to a lot of things, joe, and i think there's

a lot of exciting technologies that are still coming and it's hard to get real pessimistic about that in the future i think the dynamism here is just fantastic and will continue to be so it's hard to get too bearish on that, i think. >> all right, buddy, what a sea change for you, from the inflation-worried paulsen so, what, me worry >> let's not get run over by inflation here, joe. >> not newman from seinfeld. the other newman, what, me, worry? >> thank you. final check on the markets right now. we've got the dow down 51 points or so. the nasdaq is down about 17. the s&p though is diverging from the other two. and actually up. the 10-year is about 1.65.

i asked whether it's over. i don't know why am i exhausted today from things andrew >> i have a guess. >> i don't know. >> all right, make sure you join us tomorrow. make sure you join us tomorrow "squawk on the street" is next very big lineup today, this hour alone, you'll hear from the ceos of boeing, amd, starbucks, and spotify, good wednesday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber dow futures are a bit soft as we work through this storm of earnings, a fed decision this afternoon, a presidential address tonight, but jim, it really comes down to what you are now calling this gauntlet, this 72-hour of gauntlet of earnings that we're in. >> the companies are reporting at the same time they don't need to do that but yesterday, it was positive the overall ones were good today, it's more mixed and i think that's what is really strange, and we'r