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're going

to get to it really quickly, some of the mix is quite good, and i don't see any reason that microsoft is down. people want to take profits. starbucks, speaking with kevin johnson, if boeing trades down on absolutely nothing, that is another dow stock that is just indicating, you know what we're going to take some things down based on nothing and what was interesting is pinterest of all place because they did the pull-through comments that we saw with netflix. so there are covid distinctions between made but i think visa trumps that we never talk about visa >> no, barely. >> and that's the biggest of all of the microsoft and google -- >> yes. >> and market value. >> out of nowhere, it was fantastic. and i insist on talking about it, if only just because i tire of a company that really has a great read on the world where the numbers were spectacular. >> i'm glad you do because you're right sometimes we overlook it $500 billion, let's call it market value, it's one of the largest companies in the country. >> it's not what we focus on we obviously want to focus on

faang names. alphabet was extraordinary >> wasn't it >> remember the days we used to teak about tack? and now we speak about youtube and cloud. it was a remarkable quarter. far better than people realized. the one thing that is strange, we had no upgrades and i think without upgrades you will go up to a certain point, and then you're going to stall, so i do like it very much, but if you look at a stock like this, u.p.s., massive upgrades and that's one that one really defied gravity. >> jim, and carl, sometimes it is worth taking a step back, though, just looking at the pure size and cash flow generated characteristics of microsoft, and alphabet, and obviously, apple still to come. which always amazes just with the shear size of its numbers. but these, jim, i mean i can remember, years ago, when citigroup did a $5 billion quarterly operating profit, i think it was exxonmobil doing 10

billion, and we're seeing numbers of the likes, alphabet, free cash flow of 13.3 billion, in the quarter, they generated 50.7 billion in free cash flow >> free cash flow. >> in the last 12 months as for microsoft, very similar numbers. interesting, right operating income, 17 billion up 31% 17.7 billion in commercial cloud revenue. but again, these numbers, jim, sometimes it's worth just remarking on the shear size of the them, and the power, frankly of these businesses, which is why they are under scrutiny. >> right and also, there is an element of humility and humanity to these quarter, carl. you will have someone whom we all have come to respect, the cfo of alphabet, and she says, we are very pleased with the quarter. very pleased with what may be one of the single greatest quarters i've ever seen. there's no ubers here. they're doing things right

youtube is a profit center >> a billion hours of video watched every day on youtube and they start this direct response business. it's working that is generating real profit >> and google cloud, carl, you have, you really do have pre-cloud companies and i didn't believe that, and google cloud would be significant, i dismissed it, because it was amazon web services and azure. and the numbers were amazing and anyone who wants to nitpick with azure, just join me on "mad money" today, i'm going to clobber, i'm going to take a two-by-four to your head, but i just think that these are mason quarters, but alphabet is a company that is the old days, we would nitpick. other bets they would have, and we would say oh, man that is so foolish, what are they doing wasting money there. they're not anymore. ruth is extraordinary. i know there's lots of people involved and i tend to cite her. >> you tend to personalize

around companies with the cfo or the ceo. >> and i once was having a beer at magellan's and ruth was there, and i said you look like ruth and it was. >> the op ex was down dramatically how you can make so much money, david, and not have a cost of goods go up? how is that possible >> it's working. >> it's magic. >> yes, microsoft, too, carl, 1% margin saving actually from covid-related savings. i thought that was interesting that's people not getting on airplanes. >> you're so focused on that. >> i'm interested to hear, jim, i'm interested to hear your defense of azure, because 46 is a great number, but it's not the 47 or 48 of prior quarters and it makes people wonder today, what number do you need to post to get a google-like response. do you need to beat advertising revenue by $2 billion? do you need to beat services by several billion in the unit alone? that's apparently what gets your

stock up that day. >> i know that azure, talking about large number, i'm urging people to listen to the words of amy hood, one of the great cfos of our era, and her, she pretty much gives a rattle, down, down, of why we should be liking this stock, and i just thought that it was a superb quarter. a class of its own says barclays, i completely agree with that. big target boost, cowen. jpmorgan jpmorgan, startup-like bookings. startup-like bookings. this is a huge company and it's like a startup david, we do not see this kind of growth. we've always been told this kind of growth is simply not possible morgan stanley, the case for buying more microsoft, the prosecution rests. >> is that -- what is that >> that chart was up for like 30

seconds. i was like what are they doing >> what in the world is that >> but we've been talking about cloud for a really long time and i think the most important thing you've said is you believe google is truly a firm competitor in this arena, and to carl's question, is it starting to take a little bit of share from microsoft and/or maybe a couple of points out of its growth >> well, they would tell you yes, and that that's the slowdown in azure, they've been winning some business. i just refuse to call that a slowdown i just can't there's plenty of business carl, the cloud, i know these executives come on and they say it's in its infancy. i'm beginning to believe it's in its infancy. you just don't have this kind of growth thomas came to google and said to me that he was going to make google into a cloud force. it was so easily dismissed well, that was a mistake he's doing great but youtube is amazing i don't think people realize that youtube is incredibly watched and makes a fortune. how much is their content cost

to create versus netflix, david? >> very little i mean it costs, you know, very little very, very little. there is some acquisitions. >> yes >> we've got a good piece on dot-come, at the current growth rate, youtube will have netflix like revenue or more by the end of the week. when we come back, a huge hour ahead. >> nobody work, carl they watch tv. >> right dream s&p, jim, you got to look at some of the stuff that kids are watching these days. starbucks ceo kevin johnson is up next. and we'll talk about spotify daniel ek and hear about what he says about throwing his hat in the ring to purchase that european football club the opening bell coming up in about 20 minutes

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boeing shares look to open down, about 1.5% this morning, let's get to phil lebeau who joins us with ceo dave calhoun hey, phil. >> thank you, carl let's bring in dave. dave, let's talk about the quarter. sixth straight quarterly loss. 1.53 a share was the loss. worse than the street was expecting but you put out a memo to your employees as soon as the numbers came out and you said in

that memo you believe that this is an inflection point, 2021 is an inflection point. why do you believe that? and why do you think that you are, and i'm not trying to put words in your mouth but starting to turn the corner here? >> yeah, well, phil, first, it's good to be with you. i do feel it's an inflection point for a lot of reasons first and foremost, the way the industry came together, with the government, to keep the industry alive and well, for whatever recovery eventually returns, i think will play out in the months ahead, because i believe at least in this country, in the united states, and a few other domestic markets, traffic really is ready to burst back, and our customers are busy getting ready for it we are getting ready to support them in every way that we can. and that is right in front of us secondly, as you may know, for the last 18 months, and for the next 12 months, liquidity is the metric we care the most about. cash flow, getting back to cash

flow pov and, cash flow positive, and first quarter for us, despite a big short fall in 787 deliveries in q1, we're still slightly ahead of the track that we had planned which is, as you know, has us getting back to cash flow positive in 2022 so there are a lot of reasons why these vectors are moving in the right direction. it's always slower than anyone would like but i am very optimistic >> dave, how worried are you about what we're seeing with the pandemic, whether you look at india, whether you look at parts of europe, and does that make you perhaps re-think the trajectory of a recovery for those long haul markets, maybe push it back, already it's delayed but push it back even further? >> yeah, i don't believe that if you look at all of the epidemiology charts, with respect to spikes in other countries, while this one is prolific, because of the population and because of the state of the health care system in india, while this one looks worse and is worse, i think it

will still follow the same kind of path. and ultimately, we'll get it under control, as we move out at the end of this year so i don't think it changes that long-term recovery for wide bodies for those international routes i do worry for india, i hope the country does everything in its power to support india at this moment with supply, et cetera. it's a big deal. and i think this will have a very deep and lasting effect on domestic travel in india so we do watch that. >> dave, what's going on with the 737 max? you guys a couple of weeks ago put out essentially telling your customers, a notice saying, don't fly this, we've got some electrical issues in the flight deck, we will have it repaired, so you can identify it, make the fix, and it should only be a matter of a couple of days now that was a couple of weeks ago, and you have yet to put in the fix plan, with the faa, for how the situation can be

identified and repaired. how much longer before the airlines, we're talking about southwest, american, united, and others, will be able to fly the max again? >> well, let me start by saying it's more than a little disappointing when things like this happen and our customers can't put our lift to work, and we're in close contact with them every step of the way. the three to four-day fix recovery time frame, that relates to the work itself with respect to when a bulletin is approved by the faa, in concert with boeing, and distributed to the field. and then that work will begin. we still believe that that is a relatively short order, although i will not predict when the faa, what it's doing with its interrogation of the bulletins themselves it is a constructive dialogue going on it's a pretty simple and straightforward problem. and then therefore, fix. anyway, i'm confident we'll get

there. and most importantly, we have to try to get to meet the time lines with respect to summer recoveries with our u.s. airlines in particular are focused on >> dave, jim, first, congratulations on the extension of your ceo contract just terrific. >> hi, jim thank you. >> china, i listened to phil earlier talk about how it's been three years, and i find china really important for boeing but when i listen to the conference call so far, for instance, when i listened to raytheon, china is important. why? because we're bulking up our defense in order to save taiwan if it comes to that. the rhetoric from china and from our country about china is so poor, even worse i think to some degree than the trump era, that i just think it's inconceivable you can get orders and yet they need airplanes what can you do as a ceo to make it so you get china orders in this perilous time >> well, number one, and jim, your finger is on the right

issue, with respect to the longer-term, the future of our aerospace industry here in the united states, with respect to commercial air travel. we are the leader in the world china represents 25% of the global growth in our trade and so it's therefore, it's very important to stay involved and that we continue to support china with the airlift that we've been supporting them with. i will advocate, as a ceo, i will advocate to our administration currently, i know they're in a sort of a difficult moment, with china i am a believer that they will, we will all come through this moment, and that trade will be a big part of that this represents a lot of u.s. jobs, it's an entire industry sector that will depend on us getting back on track with china and trade. it's a big part of the marketplace. i do not want to not participate in that, and not bode well for

our industry >> dave, let me follow up on that, with this question, if you do not get a sizable order from china, let's say within the next six months, and they are still dragging their feet, or taking their time, let's say, recertifying the 737 max, will you have to change your production schedules, for either the max or the 787 this year >> yeah, i don't think so. remember, our production schedules in light of the impact of covid, we took down almost to bare minimums. one, so that we could deplete the inventories that we had created first because of the max issue in and of itself and then secondly because of the 787 delay in the first quarter so we're going to continue to deplete those inventories, keep our production rates steady, stable, we will be transparent with our supply chain. this is really a question of recovery it's really a question of recovery of those production rates. and then that march forward. it's mostly a medium-term

outlook with respect to those rates. so taking them down, i don't think so taking them up, and at what rate, that's where this matters. >> dave calhoun, the ceo of boeing, thank you, dave, for joining us this morning, on a day, carl, where dave said it in his employee letter, he believes that 2021 is an inflection point, as they move towards 2022, when they are projecting to have positive free cash flow. carl, back to you. >> phil, a lot of clues pointing in that direction. i see ces is going to be in person in vegas next january, phil, thanks for that. we will turn to chips this morning as well this morning, jim. amd's q2 revenue guide is pretty good texan, not bad either but those two names go in different directions this morning. >> texan, i know people are sending it down but there wasn't anything sending it down, texas

instruments, it's almost like the hey day of the '80s where they were so promotional and it is now hey, we did a good job. sometimes on these conference calls there are companies that simply refuse to play the promotional game about themselves now, i like that very much because what it says is, listen, don't get caught up. we're doing a good job but there's no reason for you to take the stock up. >> right. >> and i find that to be refreshing, and texas instruments is refreshing. >> amd shares are higher or at least looking higher of course we're 10 minutes away from the open and i know we're going to have lisa su joining us very shortly as well looking forward to that. >> we got a lot of wood to chop this morning we'll talk to lisa su after the break and get to the opening bell in 10 minutes don't go anywhere.

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shares of amd rallying, saying the supply chain is improved and lifting the revenue forecast this is a true blowout we haven't seen one of these in a long times joining us for cnbc, amd ceo

lisa su. i have to tell you, when you see 90% revenue growth and a forecast 50% revenue growth, you just have to say, how are you doing that well, kind of like zure, david >> it's one of those things. you do four ceos in an hour. >> i can beam lisa su. >> we used our road map and did a good job and probably took share from our competitors >> that was a tough question that you had for her. >> it was the greatest softball question and a hanging curve ball and now i have to come back with something much tougher >> you can repeat it, if you want. >> you just pants-ed me so i will have to bring in the toughest question imagine mabl -- imaginable what about 51% >> what about the presidential debate >> perhaps, carl, this is one of

those instances where we keep doing many things, like talk about the incredible brinker quarter. >> you want to go to brinker >> we can do brinker, jim. >> how about yum >> i think yum is an amazing story. on a two-year stack, some of these numbers are bananas. pizza up 8 taco up 10 kfc up 11. the restaurant business pointed out that for yum's four brands, they set per restaurant weekly sales records in q1. every single one >> i mean here's a stock that's down. >> we're eating a lot more fast food. >> one of the things that was really beautiful about what happened with yum is they are really using data. so if you go, to the start of the alphabet car is how yum is using the data, particularly for a turn-around in taco bell carl, this is one. we all know these brands but i think what we don't recognize is this is a gigantic worldwide company, other than china, and i'm shocked that every single one of them, there's always been a loser, whether it be pizza

hut, one, taco bell, another, and this habit burger, i have not had a habit burger >> i have not. >> thanks. >> you see, i'd be curious, dot com not putting up any more recipes that involve red meat. >> beyond meat should be doing better >> yes >> guy, as we obviously, we still hope to join lisa su at some point we are going to -- >> i apologize that i went through that. >> daniel ek, before we get to the open, four minutes from now, focus on spotify it has continued to worsen take a look. i think it is down 8 >> you can see it right there. it's roughly 8%. obviously daniel ek on the call, continuing to talk about the fact that you know what, we're always going to take the, prioritize the long term over the short term >> the hedge funds hate to hear that >> yes. >> they want the short term to prioritize over the long term. how about someone who is

prioritizing both the short and long term. lisa su joining us first on cnbc lisa, i apologize for whatever transmission issues there were but i got to give you, david joked about a softball question i gave you, which is that, how do you do 93% year over year and how do you have 50% revenue growth he wants something harder. so i would say, how are you able to take share in premium ultra thin and becaming, i mean it's hard for meto come up with something difficult but let me give you the door. >> good morning, guys. great to see you sorry about that before. look, it was a very, very strong quarter, we're very excited about the growth that we see in the business, you know, i think what we see is across all of our businesses, whether you're talking about high end pcs or talking about gaming, or consoles or data center, we're just seeing, you know, tremendous growth across the business and you know, it's a very strong portfolio and strong market demand so it's an exciting time. >> you repeatedly mentioned the

road map, and of course, you give us an italian road map, you use the city names, the road map being so important, and when i listen and i look at the road map, what i'm thinking about is you are not thinking short term, you're not thinking out to 2023, we're talking about a 2026, 2027 plan at a minimum. do you do that because you're accruing new customer, a google say, an azure? because that's what they want is a long-term commitment and a partner. >> yes, one of the highlights of the quarter, and really of the year is our data center business now, the "date -- the data cents we have the collaboration services and what large enterprises need and we doubled our data center business in the first quarter and see growth and acceleration as we go through the year. and it is all about road mapping. we've been working on this road map for the last couple of years. you know our road map well we have italian names. so we went to rome and milan and

genoa. and with each part, customers are planning what they need to do together with our road map. we're extremely excited. we saw significant growth in the first quarter. we see that continuing into the second quarter and it allowed us to raise our guidance for the full year but it is all about road map today, our best processor is milan, which is our newest generation epic. and we're going to be going on to the next generation next year with genoa >> i'm glad you brought this up. one of the things that i saw, we had pat gelsinger on, who was vm ware and now intel, ceo of intel and he talked about a digestion period and he said it is a glut, that there's a glut of chips in the "d the data center and to me, there's no glut, and to me, there's tremendous demand. how do we explain the disparity? >> i really do think that this is about plans we've laid out

over a number of quarters, so we've actually seen in the four, that there was significant demand for our data center product, and guiding into the first quarter, and as we went through the quarter, we saw people needed more products for their data center systems and if you think about it, it is all of the things we're using, right? the fact is we're all using many, many more digital services and they require lots of cloud capability so what we saw was strength in our cloud business and i think it really depends on where our partners are in their launch cycle, so we're very excited about the momentum that we see >> one of the things that i think is kind of curious is that when you go back to gelsinger's comments, and i'm just focused on this, because there has been a long time rivalry between amd and intel, he keeps talking about an intimate relationship with customers that i think are actually now your customers. is it entirely possible that it's not about intimacy, it's about product and quality?

>> well, jim, i would say that in general, in tech, it's always about product, quality, depend ability, road map, you know, really joint plans we've been at this for a number of years i know we've talked to you on this show a lot about our long-term strategy and journey that we're on. we're all about putting the best product in the market. and our engineers are incredibly, incredibly focused and motivated by doing that. our customers are asking more from us. so yes, you absolutely need customer partnerships and we have those, and it starts with phenomenal products, and being able to do the things that we need to do, as we're advancing in this, you know, really digital transformation of the world. >> there's a very big debate right now, lisa, about the grand reopening, and whether that means that second half will not have the demand for personal commuters that the first half does so i think by the way, something i think that by the way intel highlighted as a possibility what kind of a demand trend do you see for personal computers

>> so the pc market, jim, is, you know, in a remarkable place, i mean if you think about it, you know, the recent, the recent growth that we saw last year, and the growth that we're seeing this year, it's just very, very strong and i think it's this kind of not just work from home, but everybody wants better products, and better computing now, you want a better video experience you want a better computing experience and so the demand is strong. now, what we see is, across pcs, across gaming, gaming is huge, across data center, we actually see that 2021 will be even stronger than what we originally thought that the market would be and we were able to raise our guidance originally we thought we would grow 37% in 2021 we now see the opportunity to grow 50% in 2021 just on the strength of our product portfolio, as well as the market so we feel very good about the second half. i think it's an incredibly

exciting year in terms of just all of the technology that we can bring to market, and we're working hard at it. >> as someone you and i both respect a great deal, jenson wong on the nvidia call, he is talking about saying, listen, we're coming in with a quantum leap product, and pretty much everybody is far away from us, and you really were the existential threat look, nvidia is a great company, but do you see them as an existential threat to what you got going in say data center >> what i would say is we always count on a very competitive market i mean there are a lot of great companies out there, so no question about that. now, when we look at our group, though, and you look at computing as really the next big frontier, in terms of just awesome innovation, so we've been thinking about this for years. we have a very, very strong road map. thinking about how we combine sort of our cpus and our gpus, and we're excited about our

de xilinx pending acquisition as we bring in their accelerated computing and we will have a tremendous portfolio for the data center. so i feel great about our road map. i think computing is more and more important as we go forward. and yes, there are lots of companies that are addressing it, but you can count on the fact that we are highly invested in this road map, and we're working very hard to make sure that over the next five years, you see incredible technology from amd. >> lisa, just one last thing, can you give us a sense of what you're seeing about people coming back to the office, which of course would therefore be cpu sales, and how much could your company benefit from a genuine reopening of the office? >> well, you know, it's a great point that you're making, as we see the return to office, or sort of what this next phase will be, there is actually a return in enterprise spending and as we look over the next

couple of quarters, we're most focused on the strategic segments of the computing market we see enterprise pcs, for example, as a good growth driver we see enterprise data center servers that people need, as well as cloud, as key growth drivers. and so you know, you see many of these trends actually coming together you want great technology at home, you want better technology when you go back to work, you're going to be in a hybrid environment, so you want to be able to move back and forth between those two. and then of course, you know, i can't leave out gaming the fact that gaming is a great secular growth driver as well. i think we have a lot of trends going for the need for great technology, and we want to be the partner of choice there. >> once again, i want to congratulate you i know when intel was talking, a lot of people sent down amd to 79, 80, believing that you had lost share, or they were coming in gangbusters i wish them the best of luck but the product is a day late and a dollar short

lisa su, amd, unbelievable job, great to talk to you again >> great seeing you guys take care. >> thank you carl jim, great discussion. especially about the reopening, and it does remind me, i want to squeeze in here among all of these earnings, the call from goldman this morning on oil, jeff curry says the next six months will bring us the biggest jump in oil demand we've ever seen 50% larger than the second largest back in 2000 and they see crude going to 80 km commodities up another 13. >> i know that e.v., electronic vehicle, still not here. and talking to ford on "mad money" later tonight and they will talk about competition i think, but it's still nowhere, still 3% and i disagree with that forecast, i think if we ever got to that level, the saudis would flood, it they wouldn't put the united states back in and $80 puts the united states back in in a big way. david, you know that saudis are in charge of oil right now, not the markets. >> interesting as well, the

journal piece, that they may sell another little slice of saudi aram co. but if you look at energy equities, they have severely trailed the move in the commodity. >> yes, they have. >> of late >> yes, they have. and maybe we will find something out at the end of the week with chevron and ex son, when they report, and they have been pretty good about giving a forecast, but yet the stocks are -- >> after a very strong run, particularly exxon in the first couple of months of the year, actuallying in the lat, actually starting in the latter part of 2020, they have underperformed. >> bp barely moved yesterday incredible carl >> speaking of reopenings, starbucks beats by 9 cents, with adjusted 62 cents a share. revenue was a little shy, due to what we now know are obvious points of weakness around the world. starbucks president and ceo kevin johnson joins us this morning with another first on cnbc good morning, great to see you

>> good morning, carl, how are you this morning >> pretty good grateful for the time. i mentioned that international weakness, there obviously are some difficult spots who are still grappling with reopening, in the pandemic, but what specifically did you find worrisome ex-u.s.? >> well, if you look at the last quarter, it was a solid quarter. it really demonstrates that vaccinations are the unlock for what we call the great human reconnection and we saw that unfold across the united states. now, certainly, as you point out, you know, europe had some outbreaks and much of europe was in lockdown, in parts of this last quarter and we saw some covid restrictions in china where they restricted nonessential travel throughout the chinese new year so that put a little bit of head wind but overall, we had a great quarter. we had a strong beat in earnings per share, as you highlighted. and we raised our guidance, our full-year guidance for revenue, for earnings per share and for operating margin so very positive signs but the unlock is getting

vaccines, getting shots in arms, and look at what happened in the u.s., that's exactly what unfolded, the great human reconnection has begun >> the guidance outlook, you're right, on those metrics, it is stronger it has some onthe street wondering, at what point would you be willing to boost some guidance on comps themselves >> well, you know, we guided, you know, pretty strong comps in a wide range of comps, for this year, and you know, we're sticking to that, you know, clearly, to deliver on this revenue guidance, it's going to be at the higher end of the comp range that we've given, but i think we've got very solid evidence, if you just look at the united states, you know, the united states posted i think a 9% year on year comp, and we've commented, we exited the quarter with an 11% two-year comp. so think about that, 11% two-year comp growth over fy '19 is kind of like a five comp and a six comp, so you look at what's happened, we're just seeing that momentum build in the u.s., and as vaccinations take place around the world,

we're seeing the same phenomenon happen so we're pretty optimistic about the back half of this calendar year, fiscal year. >> kevin, always good to have you on the show in good and bad times, and mostly good, based on what starbucks has done, look at that stock, to me, i just accept that it's profit taking but i want to drill down on something. you talk about artificial intelligence as a way to be able to predict the connection and your starbucks reward program is terrific, but i want to call out panera, 40 million members, okay, for their rewards, ulta, 32 million members, chipotle just started two years ago, they already have more than 20 million members. why does starbucks only have just 22.9 million members? >> well, jim, keep in mind, what we report is 90-day active numbers. so these are customers that in the last 90 days are actively engaging with starbucks rewards. so you know, you got to benchmark it versus that but if you look at, you know, we

grew starbucks rewards customers roughly 18% year on year, and we've grown them 19% in the u.s. just in the last six months to 22.9 million so as you said, we're about 23 million. i did comment on the call yesterday evening that, you know what, i talked to our team, you know, i have this aspiration that we can double that number i don't know, you know, it might take a couple of years to do that, but it's just, it's just a matter of using machine learning and artificial intelligence to get better line of sight to those unknown customers so that we can market to them, and reach out to them, with personalized offer, and personalize their experience, and bring them into the rewards program. that is a great opportunity for upside, for starbucks over the next few years. >> kevin, it's david i always like to ask you about china and i will continue that, i think you hit 5,000 stores very recently in the country mobile order sales mix there, 34% of your sales are mobile orders in china. i mean is there a point at which

it's like okay, that's enough, or does that keep going higher >> i think that's going to keep going higher you even look at the percent of spend in our store, both in the u.s. and china, that is, from our rewards customers, and paid on that mobile app, you know, you think about ordering, it's the safest, easiest most personalized way to place your starbucks order. so i think that number is going to keep going up, and you know, as that goes up, that allows us to really elevate and improve the customer experience, in our stores and so i anticipate that number is going to keep growing in china, you know, significant portion of it is delivery as well so it's a combination of, you know, customers, you know, who want to have effortless experiences that fit their lifestyle, and a lot of them in china want to have that coffee ordered and delivered right to them >> what about store growth back here in the u.s. particularly, you know, there are obviously neighborhood star bucks that i would assume are doing quite well but those in downtown areas, who have to

still be suffering greatly what are your expectations there, given we are still only seeing 15, 20% of workers typically come back in an office building, for example, on a daily basis? >> well, you know, that's a key metric to watch. but i think that, you know, in downtown office space locations, we still see some softness we're seeing recovery, but the bulk of the recovery is happening in sort of those nondowntown, nonurban stores that typically are caves with drive-throughs and two things number one, our trade area transformation, we are repositioning stores in those downtown markets with new formats and new location, and unwe announced the cycle in june of last year, so in the last nine months, we completed about 70% of the closure, and of the closures, we repositioned already about a third of those stores and so great progress there. i anticipate this fall, we're going to start seeing businesses

sort of have their work force start to work back in the office again. you know, that's what we're planning for starbucks and our support center hire in seattle, we just told our partners, look, plan to keep working from home, until october. and so i anticipate this fall, we're going to see that renaissance and that transformation, the downtown markets and that's going to further accelerate the recovery and growth of starbucks. >> i was just going to say, kevin, the viewers might not know, you have a pretty well-rounded a. i. program, that i read last night as looking into actual vaccine progress i don't know if it is just in the u.s. or around the world but can you talk about that briefly? and what kind of intelligence it's giving you? >> well, here's kind of how that came to be i was sort of tracking when the fda announced emergency authorization for the pfizer vaccine, for moderna, for j&j, i was sort of tracking, at the time of those announcements, what was happening in our

stores, and you start to see an uptick then, as we got into the vaccination program, once the u.s. started hitting about three million, to four million vaccines a day, we saw an even greater uptick and so what i've asked our group to do is do the analytics to start to correlate as vaccines and vaccinations roll out, what can we anticipate in terms of customer mobility and traffic in our stores and so we're using that machine learning to track that in every country around the world what's that is giving suss indications of how customer mobility is unfolding, how that will show up in our stores, and that's allowing for us to plan for everything around staffing in our store, supply chain, all of the things to ensure that we great a great experience as customers, that we create a great experience as customers begin to connect and begin to come to starbucks. >> when i see a stock down, i

want to search around what might be wrong and i know that david mentioned about downtown, you have the trade area transformation program and you did say you're only 70% complete i wonder if that's one of the things that people are saying, why aren't you quicker on this change in america? >> well, it's a great question, you know, a lot of this is how are we repositioning 800 store, and we've already repositioned about 600 of those stores, the final 200, jim, the majority of those are in malls and you know, those will happen in the next six months and the reason that we slowed down on those is we're just waiting for some leases to terminate and get to the point where we can make that transition easier. so i think when it comes to the downtown store locations, that's where we fundamentally have moved quickly, and we're in a very good position so i think, you know, much of the remaining stores would very to reposition are mall-based stores that we think are going to transition to other formats and other locations. >> kevin, as always, great color

and texture around the print and we always are grateful thanks again. >> thank you, guys appreciate it. >> kevin johnson, starbucks. when we come back, as david said earlier, spotify's daniel ek is going to join us on the quarter of this european soccer ambition after the break. but first, take a look at how treasuries are fairing after the fed's post-meeting statement due this afternoon take a look at yields. as for the dow, getting a drag of almost 200 points from amgen, microsoft and boeing alone back in a minute

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we got to drill down on the spotify shares under pressure this morning reporting first quarter results i think a lot of people say look good joining us now is the founder, chairman and ceo of spotify, daniel ek. i love it when you come on the show you can explain what's really going on because your stock is often rallying after the initial decline. there's a reaction to the

monthly average user being down and so are your free users why are they down and why does it matter? >> yeah. well, thanks for having me again, jim i think overall like we had a solid first quarter. subs at the top end of the range. revenue at the top end of the range and of course our gross margin as well at the top end of the range. but as you said, mu is a little bit softer i think it comes down to a strong and solid 2020. as i outlined in my opening remarks as well on the earnings call, we are in a sort of recovery of covid, and we're at various stages around the world. some of the markets where we experienced usually a lot of growth are now still very much in the covid recovery process. >> well, at the same time, we can talk about price increases here you can't usually put them through unless you're confident. i find, and i often talk with carl and david, spotify is a bill you have to pay it looks like the united states and the uk, you agree with me.

>> for sure. and we started doing that about two, three quarters ago. i talked abouted aing another leg to the stool and the early results that we saw then was very encouraged. that's obviously continued and it's on the back of that that we felt comfortable rolling it out in more markets and i'm just very, very encouraged by the result that we're seeing across the board on engagement and the spotify users are getting a fantastic value for their money. >> it seems like you were aggressively courting creators to not talk about podcasts is ridiculous your podcast business is exploding, isn't it? >> it is we've been growing the past few years from 5 million creators to 7 million creators and this year 8 million creators it's grown very rapidly. and in the next few years we think as many as 50 million creators will be on the spotify

platform that means they'll create more engaging content which means more users will come on and then the more users will come on, the more great creators will come on as well. it's a real fly wheel in the making >> i remember the day you joined us when you talked about po podcasting as a strategic comparative for the company. when i look at the company in terms of what you pay as a percent of revenue, that's still overall revenue. you haven't been able to separate revenue from podcasting and music. is that something you'll be able to do at some point? >> yeah. we have two totally different revenue stream for podcasters and music. the gross margin profile for podcasting obviously is a bit different. we're still very much in the investment phase in our podcasting stage over time, i expect them to be a little bit better than we have on the music side. so that's obviously going to contribute to a much better story over time for spotify.

>> daniel, joe rogen is a huge influencer what he said about vaccines in younger people continues to make news what's the ready response to that and how difficult is it to remain, i guess agnostic about his comments regarding a vaccine when we know how important it is for countries to get their populations vaccinated >> yeah. i mean, i can't speak to what any one crater is talking about on the platform. we have 8 million creators and hundreds of millions of pieces of content we have a content policy on spotify, and we consistently apply it across the board no matter if it's joe rogen or any one of our other creators. >> daniel, you know i'm a big fan of spotify, but i'm also a big fan of arsenal turning around it's a franchise that is storied, and i just want to know right now, how much do you want it and can you get it? >> well, you know, jim, i've been an arsenal fan since i was

eight years old. arsenal is my team i love the history i love the players and, of ourse, i love the fans so as i look at that, i just see a tremendous opportunity to set a real vision for the club to bring it back to its glory and i want to establish trust with fans and i want to engage the fans again so to answer your question, i'm very serious you know, i have secured the funds for it, and i want to bring what i think is a compelling offer to the owners, and i hope they hear me out. >> daniel, they don't seem to be interested in selling, though. and unlike a public company where there's other things you can do to pressure them, here i suppose it's only the fan base, but you know, they made it clear, we're not sellers >> yeah. but you know, as i started out s saying, i've been a fan for 30 years of this club i certainly didn't expect this would happen overnight, and i'm

prepared this could be a long journey, but you know, all i can do is prepare what i think is a thoughtful offer and bring it to them and hope they hear me out >> well, one of the things that they're saying is that they're not interested that to me sounds like an opening offer. you have a lot of cash you are the fan owner. everyone wants to see an owner who identifies with the fans i don't want to slam the krun can is too much, but they have a lot of teams and it seems like this is just some asset for them and nothing real particular. doesn't that gall you? doesn't that make you feel angry? >> well, you know, i just focus on the club. i focus on the fans, and i focus on trying to bring the club back to glory and as you said, i'm first and foremost a fan that's the most important thing for me and i want the club to do better that's my primary interest >> speaking of glory, let's get back to spotify for a moment you are still sticking with

long-term getting to margins between 30% and 40%. is that realistic for this company? >> absolutely so i think the broader story here that i think is worth pointing out, like, we started as a music company and set out to be an audio company. more than that, it started as a streaming service and it's really becoming an audio platform when you think about that audio platform, we're creating tools for better creation, better distribution, better engagement and better monetizing. and that's going to bring revenue up across all four of these categories and some of them are going to be very high margined businesses for us some of them are, of course, lower margin businesses, but overall, i definitely think it's realistic to be in the mid 30s on the gross margin side >> daniel, apple reports tonight. you're fighting a battle with them regarding anti-competitive behavior is it time to bury the hatchet >> well, you know, all we're fighting for really is having a level playing field.

having an open platform that allows us to talk to customers and to allow us to innovate on the same premise that everyone elseon the platform does including apple. that's what we're focussed on and excited about. that's also by the way when we announced our paid offering for creators yesterday, that we focussed on as well. we're bringing forward a very, very compelling offering to creators where they can communicate to their customers on their terms they can set the pricing and it's a very, very good opportunity for creators right now on the spotify platform. >> that sounds like there's no peace offering coming. a statement of objection is likely coming instead? >> you know, i don't know what the european union will do, but obviously we're very encouraged with all the dialogues we're having with regulators around the world, and i hope that we

have a level playing field and that's what we're fighting for. >> all right thank you so much to daniel ek i know i care about the spotify price, but i think that the arsenal conversation, daniel, it seems to dominate. >> it's dominating right now talking about the superleague. >> people want you to own that franchise, daniel. >> well, thank you, guys thank you again for having me. it's always fun to be on here and yeah, we're super excited about the future at spotify, and we're excited about the early innings of what is a tremendous growth story in audio. >> thank you so much, daniel executive ceo of spotify carl, exciting show today. >> yeah. indeed we got through a lot s&p record high while we were talking to daniel as we said earlier, dow being dragged down a bit. jim, you'll have a lot to kick around tonight including ford. right? >> yeah. it's a slow show i've got sales force, yum,

stanley black and decker and ford iish i could bring it -- i wish i could bring it, but that's the best i can do, carl. >> all right >> do better next time, jim. we'll see you tonight. 6:00 p.m. eastern time "mad money" with jim cramer. good morning welcome to "squawk on the street." i'm carl quintanilla with david faber and morgan brennan a lot more tonight with apple and facebook fed decision and the presidential address to congress tonight. >> yeah. we've got a busy wednesday still ahead. we're 30 minutes into the trading session. here are the three big movers we're watching there's more than three. we're going to start with these. microsoft under pressure despite beating on the top and bottom lines. results getting a boost from business services. nonetheless, you can see the shares are down almost 3%. shares of deutsche bank surging on that company's best quarterly profit in seven years. investment banking continued to show strength. you can see shares up 9% right

now. lastly mondelez recording better than reported earnings as demand for snacks remains strong. another big mover is boeing. shares under pressure after reporting results before the bell we spoke with the ceo last hour. here's what he had to say about the company's cash flow. >> liquidity is the metric we care the most about. cash flow, getting back to cash flow positive. and first quarter for us, despite a very big short fall in 787 deliveries in q1, we're slightly ahead of the track we planned which is us getting back to cash flow positive in 2022. there are a lot of reasons why the vectors are moving in the right direction. it's always slower than anyone else would like. i am optimistic. >> phil brought us that interview earlier on "squawk on the street." to dig into some of the numbers, phil >> david, the numbers within the

numbers largely in line with what wall street was expecting the loss, however, was greater than expected. and 1.53 a share most people had them losing between 98 and a buck 15 negative $3.7 billion. that was generally speaking in line with what most on wall street were expecting. and then you've got a company's cash and liquidity balance at $21.9 billion. dave calhoun believes that 2021 is an inflection point here's what he had to say. >> i do feel it's an inflection point for a lot of reasons first and foremost, the way the industry came together with the government to keep the industry alive and well for when a recovery eventually returns i think will play out in the months ahead >> as you look at the passenger levels that are here in the united states right now, it's a little hard to tell.

the trend is for it to be -- it has improved and continues to improve. right now it's down anywhere between 35 and 45% compared to where it was back in 2019. that's the comparison. not to last year and i want to show you boeing versus the airline index and why are we showing you this? this is what you want to see in terms of boeing improving. it's going to have to be the airlines improving they are putting out a solution for the 737 max. theoretically within the next few days, maybe the next couple weeks. guys, that is going to be important, because you've got a number of these 737 maxes, the ones delivered after november that have been grounded over the last couple weeks. it's not having a huge impact in terms of the operations at airlines because they have so many other aircraft, but they would like to get them back in the air and dave calhoun says he believes an airworthy directive approved by the faa is not far away >> phil, i realize the commercial airlines, airplanes,

businesses, is one that's key and in focus for this company, but the defense part of the business is currently, and i know that will shift, but it's currently larger in terms of revenue and size it's what's been buoying this company through the issues over the last couple years. so i thought it was pretty notable what he had to say regarding china. it's such a key business on the commercial side, but, of course, when you talk about national security and all the tensions between the u.s. and china, boeing is sort of walking a fine line here. >> very fine line. and remember, defense as you point out, morgan, that is the one part of the business that they're leaning on right now as they try to clear up a backlog issue, the free cash flow problems with the commercial side of the business and that has been holding up relatively welcome paired to what they're seeing with the rest of their businesses so for boeing, that defense side of the business is critical that it continues to perform. >> yeah. the other thing that jumps out

to me is -- we've been having this conversation for a number of weeks when you see a return of business travel on a commercial scale as well, it's interesting. i know you follow this as closely as i do, phil, but general dynamics came out with earnings this morning too, and the stock is up about 1% because of the business jet piece of that company's business. and that does seem to be the area even as we await something broader based right now that does seem to be the area of corporate travel that's starting to see a rebound >> right and what you're seeing is those companies and those executives who can afford to have a private jet or who have either a fleet or they're part of some sort of a charter operation. a membership program they are utilizing those business jets. and that will continue for some time remember, the expectation is you get leisure back first for the commercial airlines. then you get corporate travel. maybe it comes back by early next year, mid next year to something reasonable and then you have the long hall

international traffic but nobody is expecting that to come back until 23 or '24. >> phil, thank you for that. great stuff and boeing's a true story today. that's phil who talked to dave calhoun in the past hour amd, stocks off the initial highs of the morning when it got back to levels we saw around the second week of february. we caught up with lisa sue and talked about the company's continued growth >> it was a very strong quarter. we're very excited about the growth that we see in the business i think what we see is across all of our businesses, whether you're talking about high-end pcs or you're talking about gaming or consuls, or data center, we're just seeing tremendous growth across the business and it's a very strong portfolio and strong market demand it's an exciting time. >> a lot of cylinders firing for amd as we heard from lisa. they do take 2021 revenue

outlook from 37 to about 50 now in terms of growth although jpmorgan trims a little bit here they were at 105 on their target and they take it down to 100 >> yeah. and as you noted, of course, the stock looked up as much as 4% or more in the very early going of course, we're only 36 minutes into trading so far this morning. it has backed off. nonetheless, she didn't back off when it comes to in terms of her view, carl, and morgan, of the overall market and, of course, jim continued to ask about that rivalry, so to speak, with intel. and their differing views of the overall chip market. >> that was very notable certainly in the interview this morning. the other thing i think just more broadly speaking, especially as we come out of the pandemic is the ongoing strength we continue to see in gaming right? and that affected amd. it was also something in focus with microsoft you saw revenue increase for microsoft. xbox hard box more than tripled

from the previous year it think it speaks to as we start to come out of our homes and you see the shift in investors out of the shelter and stocks, some of these industries that maybe got a turbo charge in the pass year where the growth is expected or could potentially expect to continue to accelerate >> yeah. not to mention, of course, the incredible growth of cloud which we'll get to in a minute when we talk about alphabet and microsoft and the demand for chips there as well. >> speaking of alphabet, shares hitting a record high after a record profit for the second quarter. we have more on the monster numbers. hey, d >> record profit and notching the biggest earnings beat since going public in 2004 over the pandemic, alphabet was the big tech laggard in terms of share price. this year it's seen as the reopening winner and the best performer among the group as digital ads continue to recover. now, what stuck out to a lot of investors and which our reporter

jen detailed well, the strength of youtube and that potential threat to netflix. the business which remember was bought by google for less than 2 billion in 2006, it is on track to pull in 29 to 30 billion in revenue this year. netflix expected to report about that amount this year as well. 46% revenue growth for youtube in q one versus 24% groet for netflix. that's how we get there. the business models very different as you well know netflix relies on paying subscribers. youtube relies on advertising. netflix spends billions and billions on original and licensed content youtube has an army of creators. laura martin estimates that youtube would add 23% to alp alphabet's share price if it was separately traded. certainly something to watch play out this year search still the main breadwinner at google with nearly $32 billion in sales.

privacy change is still a question for the companies the cfo continued to paint google as being on the side of protecting users in last night's call and investors not so worried alphabet shares hitting all-time highs this morning >> yeah. i mean, certainly an incredible quarter for alphabet, and one that investors are cheering. you look at the share price right now. when you see stat like companies search engine, 92% of worldwide traffic. maps, 89% share of navigation and youtube 73% of online video world. you've been following this closely in tech check. you have to wonder what the results do to the lawmaker and regulator case around anti-trust and the like >> always a question and something we follow closely. google out of all the tech giants is seen as the name that could see regulation first or

quicker because of the investigations it's under. investors shrugging this off we ask about it and they don't think lawmakers are going to be able to act quickly enough there's certainly presence dent there. the reason we're here with a lot of the tech companies and the reason that alphabet google was able to create what some argue are monopolies again on the call last night, there wasn't really any talk of anti-trust regulation and how that could threaten the business a little more talk than usual of privacy, and that's likely the thing that is to weigh sooner than sort of a broader, you know, extreme breakup are the privacy changes. but of course, google is limiting third party cookies on chrome but not the case on youtube, android search where it has a lot of data. >> we'll see how that conversation changes in washington, especially given some of the new personnel announcements. we'll see you at 11:00 in the meantime, look at the road map for the rest of the hour including the president's set to speak to congress tonight

to unveil a nearly $2 trillion spending plan. we'll talk about what to expect and what it might mean for your wallet plus an exclusive with sanofi ceo paul hudson on the company's earnings and the partnership they announced with moderna. and we'll speak with one name, an electric trucking name up 90 % over the last year "squawk on the street" will be right back don't go anywhere. this is how you become the best! [music: “you're the best” by joe esposito] [music: “you're the best” by joe esposito] [triumphantly yells] [ding] don't get mad. get e*trade and take charge of your finances today.

sanofi out with earnings and the stock is reacting positively to the results for more on the company's efforts on the covid-19 vaccine front, let's bring in the ceo paul hudson. paul, before we get -- relatively positive marks from the analysts and investors who follow you and particularly the guidance as well high single digits overall what is giving you the confidence right now that you can hit the marks you're putting out there in terms of what you see coming >> we've had a strong quarter one both in sales and a very high performance in eps. we restated that we're confident about high delivery digit for the year allowing us the flexibility to make investments. the critical thing is the quarter one results are proof

point in the transformation of our strategy you've seen us make progress scientifically and during a pandemic i think people can have a great degree of confidence we're going to deliver this year and we're doing it while we transform and deliver covid-19 vaccines >> i wonder a couple days ago you announced the deal to help manufacture moderna's covid-19 vaccine but there are those who look at your own vaccine business which is an important component of your overall revenues and wonder are you going to give up a competitive position with the growth of mrna as a platform to develop further vaccines >> so we are very confident with our vaccine business we had a record year for flu the year started well already this year. we have an incredibly important new vaccine for babies you may have heard recently this week about rsv, and that's the

number one cause of hospital admissions for babies in the united states. 50,000 a year. over 2 million visits to the pediatrician we're bringing forward a vaccine to -- a treatment to make sure they don't have to go through that on top of that, we're partnering with other companies as you referenced, because we're a pur purpose-driven company and have to do what we can to bring the covid-19 vaccines forward at the right time you look at the world. we're not there yet. we're playing a part on all fronts and very confident in the long-term sort of strength of our vaccine business >> yeah. certainly the rsv news, more promising for parents like me as a mother of a nine-month old right now. i am curious, though, paul, just to go back to the covid vaccine discussion more specifically, you have two covid vaccines in development right now. the one that your lead project could be ready by the end of the year if all goes well with testing.

how do you see it fitting in the broader vaccine puzzle as the world or at least pockets of the world begin to see increases in supply already >> well, we said we wanted to play our part from the very beginning. we're a purpose-driven company. we'll be available toward the end of the year. it's not done yet. you've seen the challenges in distribution as an industry just trying to get on top of thing. the tragic events in india we're going to play our part as we get to india, people will think about their third shot and how to maintain the protection for the onward years we're going to be there with both platforms and contribute. and we feel we need to >> paul, you mentioned india it's in focus with covid rates and the like what do you think is the best way to get vaccines to other hard to reach areas of the world right now? >> well, we said from the beginning we think vaccines have to be available for everybody. and one of it is the logistics

of making sure that we can get there via transportation and how they're stored and the other thing is pricing and access. we do this routinely every year. we think it's a big responsibility of governments, health care workers, those that decide to make sure it happens we think we'll get there >> would waving ip help? >> it's a bigger question than that right now i think the real question is distribution, access, supply, volumes, that's what we're focussed on >> and when you look at the second half of this year, justin back to the overall landscape here, you know, what are you most excited about, perhaps, a catalyst for the company in terms of a new drug development that is being overlooked >> dupixon keeps moving on we'll have more data later this year we shared the data in rsv. we think we just gather momentum our pipeline is building the things we called out in our

strategy are really getting stronger and stronger. so we think that momentum continues throughout 2021. that's why we're confident in the guidance >> appreciate you taking time with us. thank you. >> thank you >> paul hudson from sanofi i did want to hit quickly the hartford group it's a takeover situation. last week there were some letters that were released you saw from chub. remember, it came forward with a $65 bid or below and indicated it might go to 70. on a conference call the ceo said the following look, the chapter with the hartford is closed we have moved along and beyond that, in answer to the analyst, i'm not going to engage and talk about past events. so safe to say at this point that chub, which did not seem to really be in contention there given hartford what i had heard was their belief that their own

business plan would head to a stock price of more than 70. unless they came with a number higher, it doesn't seem likely there is a negative reaction in the shares >> the question to be answered now is the hartford in play as an acquisition with another company? >> doesn't seem to be likely at this point there were rumors of would there be another so-called white knight it doesn't seem likely more likely is they remain independent and chub saw an opportunity to try to take advantage but at a price that wasn't something they were willing to even consider at hartford and i guess now we can say, carl, that this chapter as he just said, is over >> all right, guys we'll watch that we're keeping our eye on spotify getting dinged down about 9%. it's only about a one-week low we talked to daniel ek in the last hour about the quarter. >> we had a very solid first quarter. subs at the top end of the range.

revenue at the top end of the range, and of course our gross margin as well at the top end of the range. as you said, m su a little bit softer i think it comes down to a very strong and solid 2020. and, of course, as i outlined in my opening remarks as well on the earnings call, we are in a sort of recovery of covid, and we're at varied stages around the world. some of the markets where we experienced usually a lot of growth are nowti sll very much in the covid recovery process.

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look at shares of osh gosh the ev space continues to heat up they are involved in a lot of spaces joining us now is oshkosh corporation ceo. >> delighted to be with you this morning. >> we're happy to have you i do want to get into earnings and the results that you posted this morning, but first i want to jump into something that has been a bigger industry focus and

something i know you have been working in and developing capabilities in for quite a numb of years now that is vehicle electrify kags we've seen this clean energy push taking route. at least from an investor standpoint, there's a sense we're in an inflection point how do you see it? >> great question. morgan, let me just start by telling you a little bit about oshkosh corporation in total we're a fortune 500 company. we have a rich history and we've got 14,000 people with a really strong culture, and what we do is we serve millions of people in our communities that do critical work every day. i'm talking about soldiers, firefighters, people who work at height in a variety of industries environmental services workers doing recycling and refuse collection what we do is we take advanced technology, and we design,

develop, and manufacturer highly engineered specialty vehicles and machines to allow those people, those millions oh of people to do their work productively and safely. we've been using for 20 years electrify kags in developing electrify kags i think what's happened recently, what you've seen happen is that we've always known that electrify kags provides performance benefits. of course it provides environmental benefits it's been recently we've been able to get the technology to a point where it provides economic benefits i think that's why we're seeing it take off. and you've seen it in the recent announcement that we won the postal contract. it allows us to ek electrify throughout the contract and make that fleet zero emission that's directly in line with president biden's objective, to make that fleet stzero mission >> it includes an initial $385

million investment from the postal service it's been getting a lot of attention because of the losing bidder in this competition and that's workhorse are you frustrated that more investors potentially don't understand what you do in the ev space? >> well, i think they'll come to recognize it through time. you know, what i can tell you morgan is that we won this contract fairly. we won this contract simply because we provided the best solution for the postal carrier and service. we provide an electrified platform, but it is a lot more than just an electrified platform there's a lot of technology. this is giving the postal carrier something they have not in the past. productivity benefits, safety benefits a lot of good technology on this vehicle. the postal carriers will be

delighted. we know that's why we won it so there's been a lot of chatter about it but hey, we won it fairly and we're comfortable with our position >> all right so let's turn to earnings. you operate as you mentioned in a number of end markets. seeing strength really across the board. construction being one of those key businesses for you as well what are you seeing in terms of economic recovery, particularly here in the u.s. >> well, i think the big -- you mentioned it the big key is construction coming back. during a pandemic, we had the benefit because we do compete in multiple end markets, the benefit, morgan, is that we had really strong backlogs in defense and fire and emergency throughout the pandemic. that helped us construction markets and other end markets we're in in the pandemic, it dramatically impacted we were able to perform really well when those markets got impacted that allowed us to continue to invest in our business we invested in our manufacturing

capability we invested in new products. new electrify kags products. that's allowed us as now construction has started to improve again. it's allowed us to not just improve with the market, but actually outpace the market. i think that's what we're seeing right now. but the underpinning thing is what you mentioned it's construction starting to come back. >> yeah. i mean, we have literally trillions of dloors pouring into the u.s. economy right now quite a bit of that money is going to be dedicated or is making it way to states and local governments. plus you layer on top of that what is likely although the details remain to be seen an infrastructure spending bill on a federal level as well. what does that mean for your company? >> well, it certainly will be positive for our company, morgan we've looked through the proposed infrastructure bill it's all a proposal right now. there's a lot of funding in there for roads and bridges and

a lot of funding to advance connectivity access to people who don't have it today. there's a lot of funding in there for schools and other buildings. hey, that's all good for our business we do everything from concrete placement toconstruction equipment that allows people to work at height you have to have all that equipment to do that infrastructure so that will be -- that will be a positive to our business for sure >> quickly, lastly, defense. another key piece of your portfolio. what is your outlook for defense spending >> you know, we pay very close attention to it. they have not done the presidential budget as of yet. what i can tell you is that our programs are fundamental and foundational for the department of defense we do most of the tech wield vehicles that keep soldiers safe and productive when they're doing their work so it goes through ebbs and flows, of course the defense budget for the coming year is slated to be $715

billion. when the presidential budget comes out, they'll tell us if that's going to add a little bit or take a little bit away from tech wheeled vehicles but we'll continue to invest in the business we're investing in adjajay gent it will be a $2 billion plus in defense vehicles >> defense vehicles is an area where we're starting to see more adoption of autonomous capabilities >> yep >> thank you for joining us. >> thank you april is financial literacy month. we are committed to sharing messages from business and thought leaders about the importance of financial education. >> currently 21 states have a requirement for personal finance. less than half the states in the country. and we know that when you get

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welcome back here is your cnbc covid update india reporting more than 200,000 total deaths from the coronavirus. it's the fourth country to hit that grim milestone. india also confirming over 362,000 new infections today that's the highest daily number reported by any country during the pandemic and the true death toll a number of cases is believed to be higher speaking on the "today show," dr. fauci says covid

guidelines will likely loosen as new cases fall the 7 -day average of new infections has been falling for about two weeks. and medical professionals are going door to door to try to help vaccinate people who have trouble getting out. at this summer's olympics, athletes must wear a mask at all times except when eating, sleeping, training or competing. this according to a new play book of rules for the tokyo games. organizers say they want the most spectators possible at events but they're also not ruling out holding events without spectators at all due to pandemic concerns. david, they want as many people as possible, but there's also a chance there may be no spectators >> even though a lot of the events are outside >> i wonder if they'll do piped in cheering. >> maybe they will >> a lot remains to be seen. >> we'll hope for the best it's still a few months away thank you. president biden marking hi

99th day in office by giving his first address to a joint session of congress that is tonight. we have more on what to expect elon >> reporter: david, president biden will use his speech tonight to unveil the american families plan. a $1.8 trillion package of spending and tax cuts including money for universal preschool, free community college, a national paid leave program and an extension of popular tax credits for working class families but to pay for it all, the president will also call for raising taxes on the rich. specifically restoring the top individual income rate to 39.6%. tax and capital gains as ordinary income for households making over $1 million and ending basis for gains over $1 million. those would all be permanent increases. and they asked the white house when they would take effect. the administration would only say it plans to work with congress to make sure wealthy

households don't win by shifting the date of transactions but phase one of the infrastructure plan, the white house says the once in a generation investments in both physical and human capital will be fully paid off after 15 years. however, the business community drawing a red line on tax hikes with suzanne clark warning against expanding the reach of the federal government on the backs of american job creators >> ylon, there's the payment for all this through taxes on the wealthy. there's also the ramped up enforcement of tax collection via the irs which i saw this week has been called transformational in some circles given the fact that it's been talked about for years trying to close the tax gap. now muscle behind it >> yeah. so the administration is proposing about $80 billion to the irs in order for them to focus their auditing on corporations and on high income

households they believe this is going to provide a lot of potential revenue that is actually already due to the federal government. they just can't collect it because they don't have the sophisticated tools to go after these folks. it could be as much as $700 billion potentially as a revenue raiser to help pay for some of the other investments and tax cuts that said, a lot is going to depend on what that enforcement looks like and there is some discussion of whether $80 pl is too much and whether the irs can effectively spend it all >> interesting we're going to learn a lot more tonight beginning at 9:00. ylon, thanks take a look at shares of starbucks. getting hurt a little bit here on the quarter some of the weakness on international revenue weighing on the shares. taking you back to about april 9th. we talked to kevin johnson in the last hour. >> if you look at the last quarter, it was a solid quarter. it demonstrates that vaccinations are the unlock for

what we call the great human reconnection and we saw that unfold across the united states. now, certainly as you point out, europe had some outbreaks and much of europe was in lockdown through parts of the last quarter. we even saw covid restrictions in china where they restricted nonessential travel throughout the chinese new year that put a little bit of head wind, but overal wl,e had a great quarter.

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to mark president biden's first 100 days in office, tomorrow we're looking ahead to the market's challenges and risks in the next 100 days find out more on trading nation.cnbc.com. more "squawk on the street" coming up.

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welcome, always good to have you. >> good morning. >> you pointed out on the call that normally the q-1 print you reiterate the guidance you're giving for the year. it's clear the recovery is going to exceed what you said a couple months ago >> i've been with the company almost 20 years. i don't recall ever raising guidance after one quarter we typically look at it and sometimes reaffirm, but raising guidance really i think demonstrated the strength of our business model and the strength of the overall economy i heard kevin talk about the unlock taking place in the overall economy. i think that's right >> what exactly is evident this rlly on, obviously, maybe we talk about it all the time, the pace of this recovery, but maybe you can dive into what specifically you're looking at and the degree to which you reset costs. that's the other big story of the quarter. >> i think that's right. this was a little bit of a two-fold story

it was not just the economy coming back, because actually, part of our volume hasn't fully returned, but you point out the cost side of our business, and we've really taken a hard look through covid. i think a lot of companies did ourselves included looked at what we can do with the cost structure to make sure we're as efficient as possible so when we emerge from this pandemic, we'll be stronger than we were going in so part of the success of the quarter was simply an operating costs and cost improvement and then pricing, of course, was a strength and the synergies we're getting out of our recent acquisition, it was also a strength so we looked at it and said that we believe that volumes do come back and they're showing signs of that in march and in april so hence the raise on three of our metrics. >> jim, it's morgan. i want to talk a little bit about the economics around recycling. i mean, i think back to the

crude collapse of 2015, 2016, and it really highlighted the correlation between those commodity prices and what it meant to manufacture new plastics, for example, versus recycling already created plastics what does that look like now, and in general, when you think about how many plastics are made and then never recycled or reused what can be done to change that? >> a couple things on plastics here we're looking at first of all plastic second base a great commodity for us for recycling recycling had a very strong quarter. one of our top five quarters of all-time for recycling interest dpli, it was not necessarily driven by commodity prices commodity price while they did bounce back, just bounced back to kind of historical averages a lot of this was putting new technology in our plants that helped sort through the commodities and produce a better end product that we sell at the end of the process

i do think with respect to plastics specifically, the plastic water bottles and those types of things are great for us to recycle and we'll recycle those all day long we've been focussed on how do we do a better job of taking low value plastics out of a landfill, because they really don't break down in the landfill how do we do something more productive for the environment and doing something that's economically better for us, and so we're looking at technologies that turn low value plastics into things like building materials. we've got an investment in a company that does exactly that so we think there's some real opportunity not just with those plastics that we've always recycled but the plastics that oftentimes get thrown away, and removes those and putting them into the recycle can >> broadly speaking, not specific to waste management, i wonder i remember the chinese used to

take a lot of low-end plastic. that's not the case any longer in new york city j we separate out our trash. it piles up on the sidewalk in clear bags how much of that is actually getting recycled versus just ending up in a landfill like our regular garbage? >> that's a great question we're not in the collection business in new york city. new york as you know is kind of a -- it's own unique animal when it comes to trash. there aren't dumpsters in back alleys like in other cities. you know, for us, in our normal collection operations, we strive to recycle as much as we can, whether t a municipal contract or businesses as you see in the city but i don't know exactly how much of that also gets recycled. a lot of it ends up in the transfer stations out of new york city, but -- and we'll recycle whatever comes to us, but i wish i could give you a number on the percentages out of new york specifically. i don't know as much about the

collection there just simply because we aren't in the collection business in new york city itself. >> jim, goldman did a report a couple weeks ago looking at companies that are expecting to raise prices on the consumer in the coming months. you were included along with mckesson and kimberly clark and boston beer. i guess the question would be why do you feel the consumer has the elasticity to withstand some price hikes in the coming months >> well, look, we are a very competitive industry we've never really taken a real big price increase waste management does a good job of increasing price on our customers. but we're starting to make some informationments in things like technology that ultimately serve to differentiate in what is otherwise considered a commodity type business. and those technology investments which are end to end, we think make -- give us the ability to increase price maybe more than we would otherwise do it but i think it's important that

we have to look at price increases to cover costs you know, there is a small concern here that there's some unintended consequences by some of the government activities such as unemployment benefits. i was in a shop shop yesterday into houston and that guy is having an impossible time hiring people and it may jeopardize his business because he's competing against people sitting on the couch being paid on a tax-free basis these unemployment benefits. look, i do think that pricing serves to not only demonstrate the differentiation for us, but also cost recovery and we have to make sure we accomplish that. >> yeah. point about the labor shortage is definitely something a lot of our viewers who are in small business are feeling right now i think kramer on twitter said last night inflation at the small business level is insane congrats on the quarter and as we said shares all-time high

thanks, jim. >> thanks very much. by the way, coming up on "techcheck" another big hour, shopify's harley finkelstein with the stock surging you can see up almost 10%. that all begins at the top of the hour, :0a. e110 m.astern time we'll be right back. i adore their groomers and their vets our physical, social, and mental health cared for in one place. ♪ petco. the health and wellness company. wholehearted is packed with high quality ingredients to give me energy. without it, i would've never found this. petco. the health and wellness company. what happens when we welcome change? we can make emergency medicine possible at 40,000 feet. instead of burning our past for power, we can harness the energy of the tiny electron.

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welcome back it is time for our etf spot slight we are taking a look at our fin technology innovation etf. that is under pressure, it just turned flat, but still positive for the year getting boosts from some of its top holdings like square and paypal year to date, up 9%. one name to watch in particular is pinterest that has been plummeting, despite better than expected quarterly results. investors focusing on a slow down in user growth. shares are down 12%. we'll be right back.

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welcome back the earnings parade continues after the bell with some very big names getting ready to report josh lipton has a look at what to expect from apple josh >> heading into this report it's been a good month for apple. that stock is up about 10% in april, which means it's now on

track here for its best month since december so far this year it's only trading around the flat line trailing big tech peers like alphabet, facebook and amazon. today the iphone is in focus and in march there were reports apple cut orders for iphone by 20%. gene tells me he believes this iphone cycle is tracking well, his q2 revenue is $41.2 billion, jump of 42% year over year there will be attention on the ipad and mac, those have been in hot demand as people play, learn and work from home apple wants to keep that momentum going, just updated the ipad pro with its chip and overhauled the mac 2 the question is what happens to demand as people return to the school and the office. for as services analysts expect to see continued strong double-digit growth there. bernstein, for example,

forecasting q2 representing 20% year off year growth driven by app store growth and strength as the physical stores reopen this is typically the quarter when apple does update its capital return program too morgan stanley predicting a $60 billion buyback authorization increase and 10% dividend bump. >> we're having these conversation in the midst of all the privacy stuff and ios stuff and the impact that has on other tech companies josh, i am wondering, when you look at microsoft under pressure despite beating on the top and bottom lines are the expectations very high for apple? do they have an even higher bar to hurdle so to speak? >> this past month they've seen a nice bump there, 10% on track for the best months since december, but again pull back the chart year to date, trading around the flat line, underperforming some big tech peers. you're coming off a remarkable

2020 stock surge there are other questions too. listen some analysts certainly want to know what's the near term for this company. >> all right those results after the bell josh lipton, thank you for teeing that up for us. in the meantime david, that was a very big show. >> big show. >> we're done here "techcheck" starts right now ♪ good wednesday morning welcome to "techcheck. i'm carl quintanilla with jon fortt and deirdre bosa what a morning microsoft and alphabet, blowout quarter, two opposite ways as the s&p hits a record high we'll explain. we'll break down pinterest and their results this quarter and later, two more coming after the bell tonight, we'll tell you what t