good friday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber is on assignment. for the final day of april here, and futures are red, as we come off the record highs for s&p, nasdaq, earnings are the story, amazon, twitter, exxon, chevron, and more signs of price pressure with core pc, the highest month on month since 2009. our road map begins with amazon, twitter and now apple's eu anti-trust woes plus closing the book on what is obviously a very strong month for stocks and exxon returns to profitability,

snapping a four-quarter losing streak jim though, we'll start with amazon we've been talking about some of these revenue gains for the tech giants, 41% is going to take you back to a decade ago. >> look, this is why we like faang, right we just got unbelievable numbers from here, alphabet was just another great quarter, facebook was incredible, i still think that apple, we'll talk with about that in a second but if you want a mission statement of what you want to do if you're running a company, you got to get their actual earnings report talking about supporting communities. talking about what they're doing. empowering mid-sized businesses. climate pledge vision to be earth's best employer i finished reading this and i just said if i were in retail, right now, i would quit my job and get into another profession. you are not going to beat these guys this was, i mean when i read them, they had, i mean they have

carts that walk at a human pace that drop off the different things you order and i'm sitting there thinking, who else has that as much as i like target and shipped, i just, i'm not going to go against these guy, so i feel like it's just become, it's impossible carl, they're perfect. they're perfect. >> the retail story would be enough, right? >> right. >> we could spend the entire "a" block on that but when aws is up 32, prior in the high 20s. acceleration at aws. margin surprise. advertising up 73. we're still trying to get our arms around the goliath they have become in what is essentially a brand new business for them. >> right, i mean obviously, if you're going to feature something, or sell something, you got to go to amazon now, i mean these numbers are obvious, look, google's very good, facebook, obviously, great advertising, but now, it's amazon, and i think that the more people recognize that this is the way to go, it's a

juggernaut it almost feels like some sort of flywheel where you say you know what, the more people that go, the more that you need to advertise, the more prime people, the more customers you'll have. it is remarkable we are seeing something going on this quarter, carl, and i know that we listen to ned segal, twitter is not dissipating this, but we're seeing the big three, we're seeing alphabet, we're seeing amazon, and we're seeing facebook, and if you're a company trying to sell something, i really question when you're going to stay with tv, and where you're going to put all of the budget with those three companies. >> so jim, that's kind of, it ties in with this morning's eco dh data we have the savings rate yesterday in the gdp best gdp since reagan. and now personal income soaring mostly on the heels of these stimulus checks. we did hear mcdonald's say yesterday that you could see the effect of those checks wearing

off a little bit, but i have to imagine you think this carries through for a company like amazon through the course of the year. >> yes, i do i think that this is a constant, a constant for amazon. there's so much money sitting on the slinde lines whether it be for people who buy stocks and brunswick on tonight, that you're seeing a purchasing of boats, that's insane, but people feel like they're wealthy, they've got stock market wealth, they get checks from the government, look, every single guest that you had on this morning, said the same thing, which is look, there's just too much money, and it's inflationary, and the fed is doing this, forget that, carl, that's not our job, our job is to recognize opportunity and even though amazon is up a great deal, you will get a chance to buy it, remember what i said yesterday, we open up high and then we trade down, the winners today, they will be down at one point, and you can go buy them, and you should buy them, because these companies are for the ages they're just, it's kind of like

we've got a major league, and we've got a my juror league, and the major league, there's not that many teams in, it but when you read the amazon letter, and remember the amazon conference call is always very boring because it's just about the pure financials, but when you read the letter, you realize, no one can catch these guys no one no one around the world. and they're all so amazing when it comes to charity, and they just raised the, they just raised their wages so i'm not as concerned about any labor issues they have this is a remarkable company, and you're right, amazon web services is the one that people don't think of, that is a business in itself and every one of these businesses is bigger than almost every business in the world. it was remarkable, carl. it was a clinic, and i love these guys >> interesting, jim. so it sort of brings us to the broader market we're going to close out april today, s&p is going to register five monthly gains in six months, but again, we keep talking about best earnings season in a decade, peak economic growth, trading ranges have compressed a little bit, i wonder if, as i asked you

earlier in the week, if this year selling may is going to be a real thing. >> i think there is going to be sectors that is sell in may. we've seen kind of a vicious rotation within the market if you take a look at the drug stocks, i mean the drug stocks, they've been pummelled, they're just horrendous. and today, the only one that stood out as positive, that's because of botox aesthetics are back. and that's worldwide but we're just seeing those stocks, i mean you know i'm big on bristol myers, but it's worn out its welcome for me that was a hideous quarter merck was just a horrendous quarter. i see yesterday, circle back to the hershey's and the pepsico's. why? because they're afraid of everything else. they look at twitter, ned came on, ned segal, and ned's terrific, but what did ned do, he did rope and dope, he was several times about why they're not doing as well as facebook and why they're not doing as well as everybody else in the business, and his answers are

always the same, we are on plan. now, if they're on plan, does that mean the stock continues to go lower i love ned, but i listen, like wow, that's plan what is off plan whoa so there are companies that just, facebook starred, alphabet starred, amazon starred, and then there's a lot of supporting casts and the supporting cast stocks are, like we had yesterday, remember we had bill mcdermott yesterday for servicenow servicenow is a good company the stock was down $50 $50. that's a lot of dollars. sky works had a fantastic quarter. they made a great acquisition. but it wasn't enough, carl and the stock is being clubbed and how about apple? i mean did apple do everything you wanted almost as much as what advanced micro did and it's just, whether it be chip shortage, i mean ford was down 10% and ford had been doing very well so there are a few companies, goldman sachs, jpmorgan, they look good right now, a lot of

companies are coming out of the earnings period, they're not unscathed. they're quizzical. quizzical. >> i hear you. and we're going to get to mike mayo's call on jpmorgan today calling it goliath on steroid, pretty interesting note. but jim, to your broader point about the indices, you have leon cooperman on "squawk" this morning saying stocks will be lower a year from today. at the same time, credit suisse takes their year-end target up to 4600, which implies another 9% i guess the question is whether the size of these behemoths can mask the underlying weakness in some of the sectors you're talking about. >> i just don't know i mean when i read the jpmorgan note by mayo i was trying to figure out, did goliath win that shooting match no big guy. the harder you fall, right i look at -- >> yes. >> every day, today is palladium day, somebody's got some quantity, some good that is going up in price. i mean if you're -- those stocks

have been terrific, they're paying so much for lumber and had to switch from copper of course, and there's a lot to not like longer term and to like near-term. i happened to love carl, yesterday, we did the stocks and everyone was very, very hopeful and i keep going back to stephane link with said listen it's time to buy boeing, she's buying something that is not up, i like that, there are a lot of stocks that are up, that are really coming in for some serious profit taking and then a whole 'nother group that no one wants and that's the household products did you see clorox h holy cow. >> we will get to clx. they cut their guide on, what else, jim, higher -- we kind of thought the problem going into these kinds was going to be happening last year's incredible comps, but for clorox, it's about higher input. >> right you listen to a company, and i happen to like chevron, i think it's the best of the oils, and

they lost 300 million on super storm uri, the more i hear about super storm uri, i realize that was a seismic event for a lot of companies, whether it be chips because they had a lot of auto chips made there, whether anybody uses plastic and all of these company, maybe it's going to be temporary, i know that jay powell has to just shut us off for the next three months, not that i want him to do that, but, because we are just going to hear too many things which basically say it's out of control right now. and the numbers aren't being made clorox by the way, i think it was ill-vised that they focused on commodity, because they had to take a big writedown on vitamin, on the same day that nestle paid big for a vitamin company. so that was just an ironic ugliness we'll have color on tonight color. is a great company and it's had, it's up against, we all thought if you wipe

surfaces, due get to covid and we didn't realize it was from talking to each other about surfaces that you got covid. >> no surprise, organic sales of clorox down one as we see that shift in mentality regarding hygiene. jim, i guess the counter-argument to all of this would be, i cease jeffries for example, is looking for a two million print on jobs for april, so there is a narrative that you sort of spin that out, and you can continue this rolling economic recovery as more people go to work, more people go to the office, and new york city is opening july 1 and that we could maintain these kinds of lofty metrics for, as you say, at least in the short term. >> i think this july 1 date is going to be very interesting, because i think that new york will be a magnet for tourists. if i were the different airlines that fly into new york, i would jack the prices up right now for july 1 they can do surge pricing and they ought to. it's a place to go remember, gary kelly is always talking about southwest air. well, we're ready but no place to go.

well, new york city is going to be the destination in this country, and if they can pull this off, and i think that all of the airline stocks have been up, let them take some profits and then go right back to them because the reopening of america, same thing with the cruise lines, reopening of america, let's not lose sight that there's a huge amount of money here and you will reopen america and go on google and you will look at the travel breaks, and you're going to buy. airbnb, another great one. i see so much to like after this sell-off and the sell-off is always manufacturing, carl. it's an end of the month sell-off and it is a sell in may, it is just trying to beat sellers and there's really nothing to just sell on. is it chevron? is it exxon? no, they're no longer major companies. there was nothing that stands out to me as a reason to sell, other than the drug stocks so i think it's almost by rote i got up this morning at 3:15. and it said today's going to be down i don't know, 3:15 is closer than yesterday for heaven's sake and i said that's it, after the

eagles draft that's, it i'm going to bed. they moved up so i got an extra 20 minutes. >> you got to stop waking up so early, jim we're going to talk a lot about everything, the reopening, jpmorgan, nice upgrade of our parent comcast a commercial break here. a lot more "squawk on the street" after a crazy week we're going to close it out on this friday. don't go away. did you know that petco, is now a health and wellness company? 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.

we thought it was appropriate though, given the situation, to tell our investors that there is a bit of a risk for the rest of the year on semiconductors and some other materials as well. >> that's caterpillar's jim umpleby on "mad money" and basically said look, we had an obligation to tell investors what we think will happen to material costs in q2. >> the good news is, with the rest of the sound bite, when it comes to raw materials, you need a caterpillar machine to get them out of the ground, whether it be -- [ laughter ]. >> so he's hedged, right a lot of the raw materials, the copper, he's got you covered the semiconductors, a caterpillar backhoe, and of course, these are semis but i was saying the backhoe, if i, a first class idiot can use the backhoe, because it's got so many semis in it you really to be a total bozo to

not be able to handle a tractor. if there weren't any semis in it, i would be completely stymied and throw my hands up. it is a fact that a cat machine is just a huge gob of semiconductors, and a lot of yellow materials so yes, they're going to be hurt can but boy, they've got a great story to tell, carl. they do believe in inflation i think that's the kind of stock that was down because it's been up so much but i want people to look at that, aristocrat, by the way, and look at that chart, they had a fantastic international number, latin america was good, latin america, i thought that is never good, asia, great, china, fantastic. united states, great and that's before we do the $42 trillion infrastructure bill i'm sorry, make that smaller but when i listen to lee cooperman and everybody else who comes on i feel like we're being bankrupted right now take away our master card and

our visa >> yeah, i did hear lee on that earlier, he argued that inflation will surprise the fed. but i love your point about cat. if you wanted to build a bear case around it, because of the input cost, because of the material costs, their machines are the very things that help us get those things out of the ground, as those prices are going to the moon. >> look, this is a great american company, and remember, they export, this and bowing are two companies that you really want to do well if you're trying to create jobs i know it's not in vogue when democrats come in they want to create jobs and they insist, that is hyperbole, but i do think that when you look at caterpillar's order book, it's astounding remember they have a dealer network that has their ear to the ground, i just think that this companyis the company, if you really think we're going to get an infrastructure, because they're ready. they are remarkable, they are a remarkable company they and deere, two companies

for celebrating and a two cheers for capital thichl year, they're going to crush it. this is their year and everybody who sells it now off of the semis, please, if we start getting the semis together in japan and get the semis in texas, and i will believe jim farley the ceo of ford who says we are troughing right now everybody is so negative about the ability to make more semis i mean come on, as tj rogers said yesterday, to kelly evans, the invisible hand will work, we are going to get more chips, it's not like they're going to sit there and i'm not going to make the low end chip, they will make the low end chips, carl, and charge a fortune for them. >> yes, we've talked about the degree for which the automakers for example have a little less leverage than other sectors in getting that supply going but jim, can you make that same argument for lumber and for palladium? is it beyond the chip supply crunch >> look, lumber is an issue of investment the canadians own the big lumber

mills in this country, and we also have tariffs that former president trump put on canada, and i think that it's incumbent upon president biden to call trudeau today and say we want to take those tariffs off, we need your lumber, and then lumber would, it would be cut in half it is a very easy call you get a guy like doug yearly who is such a great home builder, the ceo of toll and he will tell you, it's a one phone call situation we got to remove the tariff. and then immediately, it would break the price. copper, a long time ago, they decided to diversify to pvc, but pcv is hurt again by super storm uri and i regret i wasn't more involved and what went on in louisiana, and what went on in eastern texas, because they blew up a lot of factory, and the factories have not come back online chevron says that it is a $300 million loss

i just think, carl we will be performing at such a great level in this country, i'm not concerned about any of the outliers it's just going to be a fantastic time it really is. >> that's interesting. we will be talking about that kind of mindset as we move into may and we'll see if we get more chop in some of the equity prices we'll take a break here and get to a couple of things. the energy name, exxon and chevron, that jim has been hinting around and then we'll be talking about this eu issue for apple and their response as they are targeted once again. by european regulators futures are red. we're back after a break ♪ ♪ ♪ ♪

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twitter's going to have some weakness at the open leading the s&p laggard, the revenue up 28 is the best in almost three years, but the guidance on q2 revenue basically in line, a couple of comments about ramping head count, and that's giving way to selling we'll take a look at that when we g t oni bl autethepengelinbo six minutes.

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we mentioned clorox earlier, jim is looking at colgate in the mad dash. >> colgate i would say is not as bad as the others. how's that there's a strength i continue to see and that is pet food there is one theme that has lasted throughout this quarter which is pets and the unionization of pets, that is what saved colgate which did fine, not toothpaste if you can find anything, whether it be idex, or look, you can go all the way to alanco which i think is making a major come back, but i am just in awe of anyone in the pet business

but that is the one business that continues to grow because we saw a lot of people buy pets during the pandemic. and the ultimate one i think is chewy. i think chewy is a winner and i know those of us who use choosey are kind of used to it and kind of take it for granted, the way we take amazon for granted, but the stock has come down a lot. kind of interesting. chewy. down 10% for the year. >> well, you know, in that consumer products basket, jim, it definitely, categories matter we talked about clorox a while ago where you have organic sales down one, and colgate organic was up five, better than we thought. >> right, and colgate has a terrific business overseas, it's a very well-run company. one of the least promotional companies, carl. they don't talk. they just deliver. and i think that if you want to own one of these, i would rather own this right now than proctor. i would rather own this right now than clorox. it is doing, it is a superior consumer package good company

that also has this great pet food kicker and i love it. and if you take more perspective, you go with newell brands which had a very big upside surprise, but for the most part this group is disappointing, and it's just not where the action is. where the action is, tends to be on a day-to-day basis, switching around, it's not technology today by the way, technology very weak. including what we're hearing about apple. you know that that is, you don't want to be in apple's shoes right now. people are taking shots at you and i think that apple is a great company. but that stock comes down, too >> we want to play a little bit of sound from our conversation earlier in the week, with daniel ek, i don't know if we want to save that for after the bell, but the general point this morning is that, that apple is being a target once again, and mostly about this complaint that we got from spotify, a couple of years ago, apple's response is look, these players want all of the advantages of being on the app store and spotify became a

giant because of it but they don't want to pay for the privilege of being there. >> spotify has become the largest subscription service in the world and we're proud of the role we played in that i love the irony in it who knows where this goes but what matters to me, the big guys are constantly under attack for whatever they do and i think it is going to be another opportunity to buy apple when it subsides we had a bad tape today. everybody knows it i like the down tape i think there's opportunity near the end of the day we've had some very good opening of each month, obviously, may is more challenging, just because of the selling in may, but i don't know, i think the market is overreacting to negativity today. it is not as bad as people think. >> no, it's true the last three months, a lot of the technicians have taken note of weakness in the back half of the month. >> yes. >> they thought it would come this month, jim and it didn't happen the way they thought

notwithstanding the weakness on this final day. >> i look at sky works and people were complaining about the gross margins, and looking at the acquisition, with automotive, how fantastic is, that internet of things, and the stock is down 12, down 11 right now, i regard that as opportunity, there is nothing wrong with sky works we're in a lot of situations like caterpillar, nothing wrong with nothing wrong with and it becomes kind of at the end self fulfilling, i just want to sell even though there is nothing wrong. and one of the classes right now, illinois tool work, itw, a boring company but a very well-run company, they truly blew out the numbers let's watch that if david "jeopardy" faber was here, were here me, excuse me he would be asking what is the key to the market and i say itw because it is one of the best blowouts but it's a cyclical, carl, and people aren't interested in cyclicals, they got tired of that book, everybody seems to be tired of

everything after going through the gauntlet they are just tired. >> s&p is up what, the most for a new presidential term since fdr, right >> right. >> and we were beginning to look at signs that the vaccination trend in the country is slowing down, so that has led to a more even debate about some of these reopening epicenter names as tom lee call themselves. >> so true i mean i think there's a lot of people saying, you know, you've been recommending the southwest air every single day, it doesn't go up anymore. that's another common refrain i'm hearing. that's not going up anymore, so why should i buy it? that's stupid. you buy it because it's cheaper. apple's not going up, i don't want to join that one. it's like a club it's groucho marx time i find bargains. there is nothing a lot of the companies that are being sold. there's lots of opportunity. the fed just gave you the green light to buy jay powell is not going to give a speech today and say i take back everything i said on wednesday. it doesn't work like that.

and by the way, you want the one that i think is most attractive, if you were to ask me which one i would buy, it is the one that is completely needed, microsoft. i mean microsoft delivered, did anyone read the quarter, did anyone listen to amy, the cfo? microsoft had an amazing quarter this thing has been unrelenting on the down side. i like microsoft i mean they're as close to monopoly as most of the businesses they are in and you could argue they're getting away with it, nothing is wrong with microsoft and i keep hearing, microsoft, i don't know, and i say you don't know what? i don't know, it keeps going down well, why? that is not a reason to sell >> because we're in an environment where the definition of good isn't just good, it's whether or not it's better than google, for example, in the case of microsoft >> right that's very true and a lot of people would rather buy something that is truly awful that is doing better

look at nokia, okay? nokia is truly awful and up now for two days nokia, if i say, nokia will become a meme stock any minute the new meme stock, the micro vision, they have just been annihilated. so we have been losing that cohort i don't know what they've decided to move up today but this is nokia and they can take it to six >> yeah. you know, we've talked about a lot of the blood-letting in some of those meme names, certainly a lot of them centered around mobility, and at this point, do you think that trading community has, i guess, learned a lesson for lack of a better phrase? >> no, they don't seem to be able to learn anything i think that, well, i think that though they would rather buy an alexa than they would buy a stock. because i think that they realize that it's fraught, but the hard core people, i don't

believe there are 10 million people on wall street bets, and i think this are seven people and they're inventing names and keep recommending amc. micro vision was a company, they did something like $400,000 in sales. that was supposed to be the breakout lidar pick. i don't know how they make up this stuff they do have a great time. i have to admit they have a great time with their little names, hey, get them up, and enjoying themselves, and i mean i think they should actual ry watch warren buffett this weekend, it might be revealotory this weekend. >> and that will be this week, paying attention to becky quick, driving some of our coverage over the weekend on that as we get his sense of the economy, and inflation, and asset prices, and i want to, chevron's lower on the dow, the worst performing component, and sun is, darren woods was on this morning, jim, he talked about the discussions with activist investors, engine number one, and d.e. shaw about

this ongoing debate about how they're going to transition the company, and the country, to a more green environment here's what he said. >> some of the things we've been doing, i think they recognize as steps in that direction, trying to find ways to leverage what exxonmobil can uniquely bring to this space to help society transition to a lower carbon future while building shareholder value. >> free cash flow, 3.4 billion, jim, first time since covid, that it exceeds cap ex and dividend >> i thought it was a good quarter. darren woods handily, i think he must have joined greenpeace, the guy's incredible i mean sierra club whatever it is he now comes on, and he's the leading spokesperson for carbon capture. i think that chevron has a lot of scientists working and they're doing a good job with carbon capture and they give you a 5% yield and i feel very confident that chevron, once the selling subsides today, is going to be just fine. it is, i think it's the better

of the two companies but i do feel that when you listen to darren woods, he recognizes what i've been so, what i've been pushing for these guys to do, which is talk the environment, talk about what you're doing, because otherwise, you're going to be banned from funds. you're going to be in the cross hairs of larry fink, right it's a blackrock imperative that you do something to be able to make the environment better. these companies are doing it they're not just industrialing anymore. and i think that's to be applauded. i now people, i can't hate them as much as i used to how about that they don't deserve it. >> one headline, jim, that crossed yesterday, that took some of the wind out of uber and dash and lyft was this comment on reuters, from the labor secretary marty walsh, that big employees, in most cases, or in many cases, he said deserve to be classified as employees i wonder how long-lasting you think that fight is going to be, and what the potential liability is for the stocks. >> well, it's terrible i mean they just can't have it

i felt that it was a radical offhand comment. obviously, we had this battle in california and you have to pay these people the way you would pay a regular employee and the profit margins are reduced dramatically i don't think it's going to happen i do think that doordash is the one that has to try to, does doordash do well on a grand reopening or not, and that's the difficulty, i use doordash at our restaurants and we think it's going to be sticky, people wanting things delivered but i don't know, i mean i like a nice bottle of wine with my meal but they also do that, right, uber's got that covered with drizzly i don't want to sell these companies. >> it's interesting, jim, you know, we got open table, seated diners, making a pretty nice move in a lot of different states but then i listened to domino's on your show last night and his argument is that digital interaction is not going to go away as he told you, the diners are not going to call the restaurant

again for delivery. >> no, i think that they're not. i do think that domino's has something going that is so exciting they've got autonomous cars. autonomous deliveries. in houston i mean i think you can order a pizza, i happen to like the tomato pie with banana peppers, order a pizza, just to see the autonomous car drive up. come on that, is so cool i mean they're ready it comes to your house do you have to leave your house. but you know, go out there to the driveway >> they might be ready, but are municipalities ready for that kind of autonomous traffic. >> i don't know, but i do think that domino's told a very good story. it's mostly international. mcdonald's told a good story there are some restaurant chains that i think have survived, 150,000 restaurants went out of business, and you get a place like domino's, they have so much technology, they can put other guys out of business i mean just simply because they don't, you know, when you order from your local pizza pie, the guy comes on and says hi, and

then you tell them that you want, i don't know, you want a mushroom pepper, and it comes and it's not that, and in domino's, if you get the wrong order, it's because you screwed up, and you entered it yourself, and that's why they have made so much money oh, my gosh, internationally they will double the number of domino's in germany and they can double the number in france. and you can say, when you're in france, why would you order domino's i don't know people order domino's. france has got a lot of good food domino's, they love it. >> you're right, jim, it's a little uneven. i see restaurant brands as actually doing quite well this morning, up almost 3%. that looks like at least a recent high, but tim horton's was egative, jim, burger king, mid single digits, no where near the numbers we got out of mckinney's. >> no, mcdonald's had a blowout quarter. that was very, very positive and this stock has been on a major run. i think people should recognize, we used to have these terms

called blue chips, mcdonald's is a blue chip. can we just stop for a second and look at amazon the people who are selling amazon, carl, what are they thinking let's get in their heads i think this is what they're saying it's going down, i better sell i mean i don't think they read a thing. if they read anything, anything, about that quarter, it is impossible to sell it's that good and they just need to please, i'm begging them, to read some of the things that amazon is doing. i mean there's page after page on what they're doing with web services and what they're doing in, by the way, i don't think there is anything wrong with reading what they do for charity, because it is great but people need to read the shopping page, a whole page of what they're doing with shopping. polish customers got a selection of 100 million products. poland they're dominant around the globe. why sell this stock right here why what is the point? i don't know >> you're absolutely right, jim.

even the june revenue guide, 110 to 116 billion is above the street at the entire range. so there's, i moon i guess we're counting on a, i mean i guess we're counting on a prime day in q2 >> exactly people are selling a first-round draft pick, and they're, to buy what fourth round picks they're trading down i mean this, this company is different from any other company in the world and they talk about, by the way, jeff bezos talks about the two kids, the prime video kids, i mean i think this is a new tom clancy movie, that is, where we're all going to be talking about, that they got children, they call companies children when do you that, prime video, and aws, i mean bezos, i want to be one of bezos' kids, and how rich you are, unless he makes you give it all away, but this is an extraordinary, extraordinary, i salute them for doing so many things beyond just

delivering product what a company american company we are dominant in some things >> finally, jim, apple is basically a few cents away from, let's call it a two, two-week low. we mentioned the conversation we had earlier in the week with spotify's daniel ek about this ongoing dispute with apple take a listen to this. >> all we're fighting for really is having a level playing field. having an open platform that allows us to talk to customers, and allows us to innovate on the same premise that everyone else on the platform does, including apple. i don't know what the european union will do, but obviously, we're very encouraged with all of the dialogues we're having with regulators around the world. >> and now we can see why, jim. >> yes, i mean there's a line in apple's response, spotify does not pay apple any commission on over 99% of the paid subscribers and in europe, they have over 50% share. i don't know

i think that that's pretty dispositive for apple. people did comment on that interview greatly, carl, but of course, it wasn't on anything involving spotify. there was this love for arsenal. i'm so american, i'm like arsenal? i don't know but do people ever love that and i think they were happy with our line of questions but also felt we shouldn't have asked any questions about spotify's business i think it was a 90/10 ratio >> yes, i did notice that joe rogen, their number one podcaster, did clarify his comments about young people getting vaccinated, saying he's not an anti-vax guy, but that was a well-rounded interview with a lot to look at. obviously, some selling here at the open let's get to rick santelli this morning. hey, rick. >> good morning, carl. indeed, we are shortly expecting the chicago pmi number to come out. that will be an april number but before we get to that, before we get to the charts,

quickly, let's go to the white board. we had a march personal income number today that was just stratospheric. 21.1%. these numbers go all the way back to 1946, we've never had a higher number. now, why is that so important? well, because it really goes to show that all of these stimulus checks of course are getting in the pockets of americans and it's really bolstering that side of the equation. of course, much of that money is going to show up in the economy. and that's what all of these numbers i bring out every morn are going to start to demonstrate. 72.1 72.1 for chicago pmi we're expecting a number around 65 our last full month, march, was 66.3 but last time we had a number at 72.1, you're going to have to go back to december of 1983 to find a higher number which was 75.0 so this is really a biggie now, let's go back to the

charts 24-hour chart of 10s you can see there that we're hovering around 163 right now. and 163 means we're down one for the day. but we're up seven on the week and that is important. and as you go to a month to date chart. remember that the last trading day of march is when we peg the high yield close, post all time low close in august of last year at a basis points, and out to 174. so we finally turned the corner a bit. but we're going to basically have to literally test the low price high yield to make this month a loss, but it is rounding out, moving a bit higher part of the reason is bund yields look at the two-tay of bunds yesterday the high yield was under minus 18 basis points. that's a 15-month high yield if you go to march of 2019 chart, you can see how high that's moved and how quickly it is, and realize they haven't been at zero or higher, meaning they've only been in negative territory since march of 2019.

carl, back to you. >> all right, incredible thanks, rick rick santelli. when we come back, a rare interview with northrop kathy warden in the meantime, some selling with that, with almost every sector in the red. would he have health care and consumer dcrisetionary barely green. don't go away. 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. we can create new ways to connect. rethinking how we communicate to be more inclusive than ever. with app, cloud and anywhere workspace solutions, vmware helps companies navigate change. faster. vmware. welcome change. did you know that petco, is now a health and wellness company? their groomers work wonders for my confidence.

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the week talking to various ceos about the reopening and the degree to which it's going to involve higher employing costs and so on. take a listen to this. >> i believe 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 we can, and that is right in front of us >> this market is in a remarkable place if you think about it, the recent growth that we saw last year and the growth that we're seeing this year is just very strong and i think it's this trend of not just work from home, but

everybody wants better products and better computing you want a better video experience you want a better computing experience and so the demand is strong. >> if you look at the last quarter, it was a solid quarter. it really demonstrates that vaccinations are the unlock or what we call the great human reconnection 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. and 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 jim, that is something we talked about a couple days ago that is the problems xus, potentially could act as a bit of a damper on this some argue overheated growth we see in this country. >> i think you're right. starbucks clearly, they did not perform well in some of the big international markets because of

covid. boeing needs international travel to come back. it's not coming back it's just not. i mean, we'd like to think it would come back, but it's not happening. the quandary here is lisa su in advanced micro they're not done with the steel that's got to close. people feel there's a peak in the pc market. i think people feel that way about apple too. i don't think there is i think work from home is going to require a whole new balance and there's plenty of uses for the chips of advanced micro. i think amd is a buy >> jim, there's a lot to be discovered in the coming weeks we're back below 4200 on this friday but moderate selling as we said. we're back in a minute t-mobile is the leader in 5g. we also believe in putting people first by treating them right. so we're upping the benefits without upping the price. introducing magenta max. now with unlimited premium data that can't slow down based on how much smartphone data you use. plus get netflix on us,

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a friday edition of stop trading. >> the great reopening when you start opening your businesses, the sticker shock is not from food, not from labor they're both tight but it's insurance your insurance rates have just skyrocketed. i don't know why but probably the best one, evan greenberg at chub, he has done a remarkable job piloting the company. he tried to buy hartford, didn't

get it i think they're going to have a magnificent next quarter this quarter was good. the insurance stocks bore people, but they make a lot of money and evan greenberg is a money maker. >> jim, you're speaking from experience are you opening the restaurant on wednesday >> we have a couple soft openings, and i hope to see some people there, because it is going to be -- we have -- you know what? you can't have everybody there at the beginning, carl you don't know whether you're going to have a full house i do hope to see you there's an invite from the me to you on tv. how do you like that >> you, me, and david, we'll clean house. we'll have the bar all to ourselves. >> i did my pricing on tuesday i'm jacking the price of beers up by $2 i had to keep the chips the same price. victoria is my featured beer >> you got clorox tonight?

>> yeah. logitech, the way to win in video games. i want to talk to him about semi conductors but many different devices. i think linda rendle is doing a good job, but colorlorox is getg crushed. and it's the time to buy a boat. have a great weekend >> jim, we'll see you tonight. have a great weekend, man. "mad money" 6:00 p.m consumer sentiment is on the way. don't go anywhere.

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good friday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan and mike san tolely. selling this morning despite at day of a blowout tech earnings eco data pointing so higher wage pressure now consumer sentiment let's get to rick. >> yes consumer sentiment is a final read for april so we take the mid month reads we already have and toss them. mid month read for headline is

86.5 that now turns into 88.3 88.3 that is definitely a solid number and you have to go all the way back to march of 2020 to find a bigger number. and if we look at current conditions, 97.2, and 82.7 for expectations that follows the 99.7 that's tossed other than current expectations which remain exactly the same as our mid month read, there were improvements now, on the inflation front, some surprises on the one-year inflation, it moved from a mid month of 3 .7 down to 3 .4 this is significant. because 3.7 would have been the highest read going all the way back to march of 2012. so this mitigates that to some extent and a latter move on the five to ten-year inflation that remains at 2 .7. if we want to put a face on that, it was 2.8 final read in march and 2.8 final read in

march was the highest since august of 2014 morgan, back to you? >> rick santelli, thank you. we're keeping a close eye on amazon and twitter we'll get to both of them in a moment first, here are three other big movers that we're watching this morning. 30 minutes into the trading session starting with color ex under pressure after the company cut the full year forecast due to higher commodity and freight costs. shares down. gilead missing on revenue. the drug maker impacted by weaker sales of hepatitis c and hiv drugs. it did benefit from remdesivir treatments lastly, western digital in the green. the semi conductor name topping earnings estimates with stronger memory chip prices among the positive factors for the quarter. as you can see, shares up 4 %. mike >> morgan, thank you very much we had a record quarter for amazon profits they more than tripled in the first quarter.

revenues soared 44% to $108 billion showing strength in all the business lines our next guest raising his price target on the stock to $4600 joining us now, internet analyst john blackledge. good morning, i know you cover twitter. we'll get to that. amazon was well ahead of expectations, but in a way not in an unexpected way we saw the blowout earnings across big tech. amazon, everything seems on trend. how does it filter into the investment case from here, and i ask because just today the stock nosed above where it traded on september second it's been swais. it doubled in the year before that what now valuation-wise gets you excited based on the numbers >> yeah. like you said, they crushed the first quarter numbers. and everyone was concerned about the q-2 guide. that was better than expected. q-2 is the first quarter of a

lapping the pandemic search from last year. revenue guide was strong 28 % growth at the high end. that was above us and the street at high teens growth and then the op income guide was huge at the high end, 20% above the street so we did raise estimates price target from 4400 m implies 30% up from here i think we need to continue to sustain growth i think it should get the stock moving the stock has been inching up the last couple weeks. we have a lot of up side for the price target, and we expect it to be a strong year for the company. >> and aws, again, it was strong growth, but maybe in line with what people were looking for how does that play in at this point? people i know have always been excited about that, but also now advertising maybe as more to the forefront in terms of being an accelerant to the top line >> yeah. no, exactly. actually, mike, aws growth

accelerated. i don't think people were expecting the acceleration the backlog had growth had been great in -- before last year the acceleration was huge. we expected to accelerate more next quarter that was positive. you called out advertising advertising accelerated for the third quarter in a row i think it was up almost 80% aws and the advertising segments are huge for amazon's margins. for us, about 80% of the company's operating income is from aws and advertising so if you have both of those segments accelerating, it gives them a lot of optionalty on the margin a lot of the options to make investments in other parts of the business >> john, it's morgan it seems like based on what we've gotten this week in terms of earnings, the biggest tech names are getting bigger amazon, the revenue for advertising was seven times greater than the revenue we saw

for twitter. you can make a similar case for alphabet and the run rate for youtube versus netflix, for example. how does this speak to the fact that the winners are becoming even bigger winners right now and the landscape seems to be shifting? >> yeah. you're right you know, alphabet crushed with search, a huge search acceleration and youtube, facebook crushed their numbers and then amazon massive growth like you're calling out. pretty big scale at this point it goes down to who has the best -- who provides the best returns for advertisers. and they are the most scaled players. they provide the best returns. and so that drives the ad spend. for twitter, it was disappointing. everyone, all the other platforms snap as well had great quarters and they came on the top line and then their forward margin line was disappointing and the user growth.

you see it down 12% today. we'll see how they do, but for sure, you know, kind of alphabet, facebook, amazon, outperforming on the ad side >> it's interesting to me, john, that you would have amazon and alphabet, for example, coming out and saying that yeah, we basically saw this turbo charged growth thanks to -- maybe not explicitly, but they've seen this turbo charged growth thanks to the pandemic, but they expect it to continue growing and they expect that usage, the sales to continue to be sticky even as the economy recovers, and people start doing other things as well on the flip side, twitter, the fact that you are seeing that disappointing guidance or e-bay, for example. if ever there was a time for e-bay to make the mark, you would have thought it was this past year. why are some saying they'll be able to stay resilient and others are not >> yeah. i mean, e-bay saw growth it hadn't seen in 15 years. but then here come the comps

and so for the bigger platforms, amazon, google, google search, again, kind of they have a better offering. and so they will accrue more dollars. but at the same time, their growth will decelerate through the year as they face tougher comps. but yeah, no, i think it's again better returns, you get the dollars. and you maintain or you grow market share >> and just quickly before we go, john, i know twitter there's a $54 price start. where it was trading now and seven years ago, $54 still >> yeah. i mean, they need to get their direct response advertising business going it's about 15% of their ad business you know, they're working on it. that really played well during the pandemic whereas brand didn't so if they can get it going in the coming years, you know, kind of they can perhaps grow market share, but if they don't, kind

of like we're talking about, these other platforms are going to be growing, going to be kind of grow faster than them >> yeah. as they have been. john, thank you very much. appreciate it. >> thank you the eu meantime is accusing apple of setting restrictive terms on the app store our josh limipton has the lates. >> the european commission has issued a statement of objections the preliminary finding that distorts competition in the streaming market and abuses the dominant position in the distribution of music streaming apps through the app store we have the executive v.p. on the news >> app store rules are a concern for many app developers beyond music streaming. because they depend on the apple app store as a gate keeper to access users of apple's iphones and ipads. and this significant market power cannot go unchecked.

remember, this case started with spotify which, of course, competes with apple's music streaming service. for its part, apple is not backing down one bit, saying the commission's argument on spotify's behalf is the opposite of fair competition. ultimately the risk for apple is the eu imposes fines it's hard to imagine any fine that dents apple with a net cash position of $83 million. european regulators could order changes to the app store business model, perhaps impacting the take rate. we are likely a long time from any kind of conclusion apple as the opportunity to respond to the commission's concerns and if necessary, appeal any decision in court and the legal battles can last for a while. we know that for example, the european commission and apple have been going head to head in another fight in taxes since 2016. in that case, they filed a statement of objections. she was eventually overruled and apple won, but that battle continues. carl, back to you.

yep. long time apple watchers are familiar with how this generally works. josh, thanks josh lipton. as we go to break, look at the road map for the rest of the hour energy roundups on the way with chevron and exxon under pressure following today's earnings reports. gm making a big bet in mexico and neo feeling the chip crunch a closer look. coming up next, the ceo of northrop grumman joins us to talk about why she chose not to join other defense companies lobbying for federal covid aid last summer. >> we internally believe that we can offset cost increases in certain areas in covid was no exception. we continue to look at ways that we can become more efficient inside of the company, make better use of taxpayer dollars, and offset the shocks that come

to the system on occasion rather than asking the gornnt tvemeo provide us the funding to address those issues

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xfinity. it's a way better way to watch. welcome wac in what has been the big week for aero space. northrop grumd segment sales jumped the company touts a big book of classified business and is the

prime contractor, raised the full years sales and earnings forecast i spoke to kathy warden about the results and more including the fact that the company is hiring >> last year we hired nearly 14,000 people. this year we'll hire at least 12,000 we've continued to see strong retention of the work force. we're setting 7,000 new employees last year and expect about the same this year we are finding the talent we need but we're also prepared that the labor market will likely tighten a bit this year as more companies expand particularly in area areas. >> we have a little more clarity for fiscal 2022 and how the administration is thinking about this from the top line standpoint overall, what's your outlook for the trajectory in coming years for the defense budget

>> we see defense budgets flattening a bit but still at strong levels compared to historic norms and more importantly, within the budget we see some areas growing faster than others for instance, space, nuclear deterrents, and advanced technologies like artificial intelligence, computing, and next generation networking and these are all areas that northrop grumd is invested and performing in. >> in terms of the b-21, and i realize there's limits in terms of what can be discussed the fact the aircraft has a wing design that speaks to the stealth capabilities is there anything more you can share about the design or the development of this plane, especially since we're starting to get comments out of china that there could be supposedly a comparable aircraft under development there? >> so there isn't a lot that i can share about the design as you might expect the u.s. holds dearly the design

and the specifications of a system that is so core to our national security like the b-21, but i can say the process we're using for developing the aircraft has reduced risk that we would normally see manifest in the testing of the aircraft by having surrogate test beds, being able to pull a digital thread from the design through to the production floor, and this is what gives our customer confidence that we'll be able to deliver not only the very capable b-21 bomber we've committed to but also do it on budget and on time >> yeah. you mentioned the land-based leg of the nuclear triad it's been under some scrutiny lately you've had some lawmakers who maybe perhaps have refloated the idea again of extending the life further of the current minuteman three icbms. the biden administration getting the nuclear posture review

underway as well why is it so crucial for the u.s. right now to move forward with the gbsd program? >> when you look at our current icbm system, intercontinental ballistic missile system it was put in place in the 60s think about how far technology has come in the decades since. so the thought that we would simply update that system is just not possible, given where technology sits today. it makes a lot more sense to replace the system, leveraging the modern technologies as well as that digital eco system that i just referenced. and it's shown through studies that it's much more affordable to do so so we are six years in on a program that was started in the obama administration to, indeed, replace the current icbm system, and we expect to be able to begin field agent the end of the decade >> let's talk about space. 29% increase in that part of the

business in the last quarter the strength expected to continue there there's one analyst that put it to me an explosion in classified awards how would you assess the state of the space sector? the command you're seeing both for the company and the fact that the landscape seems to be emerging? we have all of this government business but also commercial space >> so the primary driver here for our growth in space has been national security. and that's because the technology that we develop is helping the u.s. and our allies stay at the forefront of being able to operate in space, and support every mission from intelligence collection through communications, and providing necessary information for our military on a daily basis. now, at the same time, we've seen new entranlts in space. they're focussed more on commercial markets like space travel, communications, launch

services, and we see them as important partners we work with most if not all of them in some capacity or another. but our primary focus remains on the application of technology to national security space. >> the chip shortage is really in focus right now we're seeing an increasing number of companies across an increasing number of industries talk about it, and have it affect their production. you were actually at that recent white house semi conductor summit that took place earlier this month i wonder how you would assess that piece of the landscape and is this something that's affecting the company or the air space and defense industry as a whole right now in. >> well, yes, i was at the meeting that the president had with his cabinet members to talk about the chip shortage, and i represented the aero space and defense industry we have our down foundries where we support applications of m microelectronics to national security needs but we also rely

heavily on the global supply chain. so we wanted to ensure that the voice of aero space and defense was heard, and that the consideration for our needs was also incorporated into the thinking of the administration i'm really pleased with the administration's intent to invest in research and development, and to incentivize more domestic supply for advanced computing it's not just important to the aero space and defense industry, but as you noted to every industry which relies heavily on advanced computing >> finally, i just want to shift gears a little bit here and talk about the fact that there are quite a number of women in executive and c-suite roles within the aero space and defense sector that's not to say there couldn't be more, but relative to other industries it's notable. i wonder how you see it. >> well, i'm proud that over the

last sec cade or so -- decade or so we have far more women in leadership positions inside of our company. and i believe that women contribute in important ways to not only the work that gets done, but the way in which that work gets done and we need to draw talent from all genders, all races, and in order to do that, we need inclusive environments so it's not just about diversity representation but it's about a culture inside of the company that welcomes people and allows them to perform at their full potential that's been our focus at our company. it's what's increased our representation it's what's increased our retention of females and minorities inside the company. and i'm proud to say it's what's driven our performance and you have been recognized for those efforts. it's worth noting. this was a wide ranging interview. we also talked tech. more specifically, she calls

northrop grumman a tech company. technologies that can take on more significance as the u.s. seeks to encounter adversaries the tech is in focus for major programs they are developing including the air force bomber program she spoke about. it is classified, but it is according to at least the house armed services committee chair adam smith, quote, on time, on budget and being made to, quote, work in a very intelligent way that's notable for a big ticket program like this. as one analyst put it to me, between that and between gbsd which is expected to be a $100 billion program, some of the other key things they're prime on, the big ticket programs for the company, if they continue to be projected along the current funding path, that this will be according to that analyst, the fastest growing defense company over the next decade >> of course i looked through a world at the valuations, how the

market perceives the companies and northrop hasn't been as cheap compared to the s&p since '09. it's obviously not exactly in the sweet spot of what investors love right now which is leverage to a cyclical recovery, but they got very cheap in the election and then recovered since to come degree if the market decides they want steadiness, without downside risk to overall budgets which seems not to be the case >> it's a key point, especially because of the election. there was a real shakeout in the stocks the worst case fear is you could see a 10% cut to the budget. now it seems to be and we heard the comments and something similar from lockheed martin last week that we're not going to see major cuts to the defense budget you're seeing it play out in the earnings

especially the names that have both commercial business or business jet business and defense have performed very well and are very much in focus right now for investors. >> guys, as we go to break, look at shares of microvision down after reporting a wider than expected quarterly loss although off session lows. the dow at session lows looking at a second consecutive weekly loss, and possibly the worst weekly loss in a couple months we're back in a moment

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time now for our etf spotlight. looking at the energy sector ticker lxe under pressure this morning. up more than 30% for the year. the group's biggest holdings, exxon mobile and chevron reporting. chevron matching earnings. profit falling 29% from a year ago with weaker refining margins. the stock down 2 .6% for exxon mobile reporting the first profit in five quarters. the oil major saying it lowered

cash operating expansion compared to a year ago and exxon up 40% year to date. down a little over 1% at the moment a programming note as we head back to break don't miss the small business play book on may 4th the most trusted voices in business provide critical advice and vital resources to help owners overcome extraordinary obstacles and stage a strong comeback register now at kro cnbcevents.com/playbook. we're back in two. folks the world's first fully autonomous vehicle is almost at the finish line today we're going to fine tune the dynamic braking system whoo, what a ride! i invested in invesco qqq a fund that invests in the innovators of the nasdaq 100 like you

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here's your cnbc covid update at this hour. as india reports a record 3 386,000 covid cases in the last 24 hours, and around 3500 deaths for a second straight day, vaccination efforts in some regions are faltering due to a shortage of doses. nationwide nvaccination is scheduled for tomorrow some locations are stopping giving shots because of a lack of supplies. oxygen cylinders delivered, masks and rapid covid testing kits but no vaccines the head of world health organization says he's encouraged by the international support that ipd ya is receiving. he also says it's good news that hospitalizations and deaths are starting to decline in brazil after four weeks of slowing infections and a positive sign in southern california after a 13-month shutdown. disneyland is reopening today. but only for california residents. and we know a california resident, carl, who will be

there, our own julia i believe she's going to be live in the next hour that should be fun to watch. back to you. >> she is, and she brought us the news exclusively that it would reopen, and now she's there today. we can't wait to see her thanks take another look at amazon today. it's one of the few bright spots in what's kind of a tough tape on this friday as we said earlier, record quarterly profit revenues up 40 plus. joining us to weigh in is tim bray, former amazon v.p. tim, happy friday. thanks for the time. >> glad to be here >> i want you to walk me through aws just to start. what explains the acceleration in your view and what explains the upside in margins? it's really taken the street by surprise >> well, you know, aws is 32% growth year over year. 30% margin 54 billion run rate. what a business. that combination of margin and run rate is unbelievable they wonder by jessie got

promoted that's your answer that's 47% of amazon's operating income that's a story >> where do you think that business is coming from? new business or is it a share shift? >> oh, there's a lot of new business in there. and they listed a bunch of new customers. it's not hard to understand. the cloud business is pretty big. if you look at the whole enterprise it business, it's huge last time i saw a number it was 1.7 trillion the cloud business is looking exciting, but it's 10, 15% of the whole it business, and it's going to be a lot more than 10 or 15% ten years from now. there's a lot of room for growth in that sector >> right as for the core retail business, tim, you know, as we were in the last fall and last summer everybody envisioned a point at which we would get control over the pandemic, people would shop again. we have seen overall e-commerce share of retail at least plateau here now there's a new narrative. that's that household budgets

are so flush with cash that they continue to go out they can continue to go out and spend on services and goods and still keep their spend on sites like amazon. you think that's legit >> i think that's legit, but i don't think that's the whole story. if you look at the financials, at the size that amazon is, this 40% growth rate is really hard to understand. you have to worry about the law of big numbers can it keep on doing this? if you look at the thing, i made a list of things they're expanding into, pharmacy, nfl merchandise, amazon one payment technology, amazon business global procurement which has 5 million customers and 25 billion in revenue prime video partnership. is there any sector they're not expanding into if you can't get organic growth in the sectors you're in you go into more sectors they're managing to keep it going. it's an astonishing story. >> they're entering into areas where they're a small piece of a

larger pie you mention big fek spending in general and aws is kind of growing quickly within a massive pool that's now kind of funding everything else that or most of what else amazon is doing right now. is it a sustainable model to maintain aws inside of amazon and have its profits kind of fund all the other ambitions >> yeah, i don't think so. because if amazon is trying to sell computing services to everybody with aws, you have to realize that for every million bucks you spend with aws, a third of it is going into amazon's cash flow to fund other things which are probably competing with you i think this is going to become an increasingly significant head wind for aws in getting ahead of the growth i don't think this is a controversial opinion. i'd be looking at spinning off aws under my own control as opposed to doing it with washington d.c. pointing a pistol at my head a few quarters

from now it seems like a smart idea and not doing it feels like a mistake. >> i wonder what you think about the work force and the employee efforts. obviously there was that union effort that was closely watched and is being contested to a certain extent down in alabama the company just recently coming out in the last couple days and saying it's going to raise pay for a significant swath of its workers. are they doing enough? is this something that's going to continue to i guess add to cost pressures for the company longer term? >> well, i mean, yeah, there was a big organic shift in jeff's most recent letter to shareholders they've added significant top goals. their goals are now amazon strives to be earth's most customer centric company and earth's safest place to work well, that is clearly a response to the buzz of bad news around amazon working conditions and injury rates and the unionizing

pressure clearly the company decided it's not to have a better story to tell in terms of the way it treats its employees you asked the question is it enough well, who can tell if you look at the macro economic picture in the whole western world, the level of inequality we're seeing is something that has been increasing steady since the 70s and it's astonishingly high. you have to assume that political pressure is going to emerge around the world, trying to address that, and one of the best ways to address that is to push people's pay. amazon good for them on trying to get in front of it. is it good enough? that's a politics question that's going to be decided in legislatures and government offices around the world i think probably not i think the pressure from the political sector just to hack away at the egregious inequality is going to be a big deal in the business world >> well, although, i mean, there's the external response, and then there's what the employees themselves think, tim. when you're raising pay by a

billion dollars across your work force, how do you think that gets read by the employee base >> well, you know, they say that some big number, 94% of employees would recommend a job. it's pretty clear amazon isn't the worst place to work. if you need to have a warehouse entry level jobs, there's worse places to work than amazon good on them they are moving the needled and let's hope they drag along a certain amount of that part of the economy with them. but is it enough i'm still not convinced. >> we'll find out. very provocative notions about aws and we'll see how the labor structure evolves over time. we love checking in with you thanks again >> see you later well, the white house is making the argument only a small number of taxpayers will be hit by a change in capital dwaynes but according to a new study the issue is a little more complicated than that. cnbc wealth editor roshtd frank is with us now to break et down.

hi, robert >> good morning, morgan. biden's plan to increase the capital gains right targets taxpayers who earn more than $1 million a year the white house says it's only around 500,000 people or a sliver of the wealthy. but economic research shows those million dollar earners are not the same people every year, and over time, the actual number of people affected will be much larger a study by bob carol, the tax foundation looked at million dollar earners over a nine-year period it found that more than half made the list for only of those nine years just 6% for million dollar earners over the entire period it also found that one-time capital gains win falls were a big reason many people made the list and then fell off a majority hit the number in a single year by selling a company or asset may they have spent years or even generations trying to build capital gains accounted for half

of those one-time million airs as a study concluded, millionaires are a highly transend group of taxpayers and capital gains realizations is at least one reason now, because the tax hike would not account for asset inflation and because this is an ever-changing group, the true number of taxpayers who could ultimately be hit by the capital gains hike is actually likely in the millions, not a half million, over the next decade. mike >> robert, yeah. numbers do get tricky when you look more closely. appreciate it. as we head to a break, take a look at the biggest gainers on the dow for the month of april dow is off about 2 .5% visa and sales force leading the way. stay with us

could comp hit a highest level be another sign of inflationary pressures how to hedge the risk on trading nation

more "squawk on the street" coming up.

a big push for big government spending. we look at what it could mean for the economy. steve? >> yeah, mike, if president biden is successful in gaining roughly 4 trillion in additional spending he would usher in gdp not seen in the u.s. in decades, maybe never. according to some work conducted by former obama cea share jason furman at the request of cnbc, federal spending would raise to 24% of gdp in 2025 that compares to 21.7% without the new plans but plus the relief plan, just below 21% at the highest in the obama era and 30% now you can see because of the relief plans that will run off. jarod bernstein tells me we think we're getting back to

levels of the 60s of government investment where government as a share of gdp was helping to support really economically game-changing innovation but a former cbo head says this spending redirects more money into unproductive parts of the economy and won't lead to better growth he told me, quote, at some point to keep them going, you need more money and they are layered on top of existing short falls in social security and medicare. the shadow size of government is bigger than the numbers suggest. well, how does u.s. rank france is the highest with 55% of the economy coming from government spending. the combined federal and state spending in the u.s. is above switzerland and ireland. 2 percentage points would bridge the u.s. about to the level of great britain. so it's bigger government, more debt, higher taxes on corporations and the wealthy versus universal pre-k and free

community college. stuff that shows up in quality of life but not so much maybe in gdp. >> all right steve, thank you let's get over to cme and rick for the santelli exchange rick >> good morning. thank you, morgan. i'd like to welcome a special guest larry lindsey. president and ceo of the lindsey group. a long list of positions in government academia and business >> great to be here with you >> all right we have three topics today fed taxes and debt let's start with the first one we had a two-day fed meeting it didn't result in any change we listened to the press conference lower for longer don't worry about inflation. transient is the favorite word lots of platitudes don't get me wrong the fed stepped up when we needed them. they did a great job dollar swaps, repos, they did a great job, but they stepped in when they needed to. the problem is they never step out when they need to. we need to see signals from the marketplace. your thoughts on the fed

>> oh, absolutely. well, i don't think the fed is going to change. i really think they're committed as is the administration to making sure we're at full employment by the end of 2022. and they're not going to do anything to stand in the way of that by the way, i'm sure we will be there, and possibly sooner so the real question is what do they do then and that's where they don't have an exit strategy i mean, you're not supposed to start piping when you get to pull employment. you're supposed to start typing before you get to full employment so in this case, i think they're going to be lower for longer, and, therefore, lagging what's really happening >> i completely agree. let's move to taxes. this is a big topic. we've had three programs that are rather large the latest, of course, being the american families plan $1.5 trillion over ten years

and there's so much going on here especially after following the plan for infrastructure. your thoughts just in general on taxes and the notion that we have pretty much put ourself in a position in my opinion where there's no choice but to raise taxes. but is it the most efficient and are the taxes they're raising optimized to bring in the most amount of money at the rate they're depicting? >> well, no, they have two problems the first, the proposed 43% capital gains tax, is above what everyone, including the joint committee on taxes says is the revenue maximizing rate. so in effect, what the administration is doing is foregoing government revenue just to punish the rich. and that makes no sense at all right? government should be about raising revenue, but doing --

but losing revenue just to punish somebody you don't like and score some talking points, no, that's not sound policy. it shouldn't be sound policy no matter who is in the white house. >> now, larry, we're at this point politically where just saa thousand percent true, and i don't think it isn't, how do we get politicians to deal in a reality versus all the political strategy that goes on presenting these plans to cater to various elements of the demographics of their base i mean, we can see, based on some of the research that you and others have done and read and put forth, that this isn't the way to proceed how do we get back on track? >> well, i mean, we still have elections and we're the voters and so we're part of the solution, and by definition therefore we're part of the problem. generally, we don't like pain and so what do we like

we like -- we have a coalition government we've had it for 50 years. one party that likes spending and one party that likes cutting taxes and they govern together and that's why we have what we have we've gone off the rails completely in terms of how much spending we're going to do, but the other point on taxes, rick, in general, what they're doing is they're taxing the supply side of the economy. this is the job creators, the business creators, the entrepreneurs, the technology people, the innovators they're turning that into aggregate demand by sending checks to everyone higher demand, less supply this isn't hard to figure out what happens higher demand, less supply, means higher prices and more inflation. so their tax program is going to be, if it's enacted, going to further complicate the problem

the fed is going to have because we're going to be piling on supply side type inflation policies along with the demand side inflation policies. >> excellent larry, we're not going to have time for the third topic which is debt but we'll have you back. i think the debt will last long enough to the next time you're on thank you for joining me today always a pleasure. carl, back to you. >> all right rick, thank you so much. rick santelli. we're just a few minutes away from "techcheck" on this friday. the return of beeple will join us to talk about his new wave of nft art. we'll be rightac bk. ♪ irresistibly delicious. ♪ ♪ pour some almond breeze. ♪ ♪ for the maestros of the creamiest-ever, ♪

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maankijor averages are lower newell brands are up raising full year forecasts. the ceo will join us this upcoming monday at 10:00 eastern. also on monday, don't miss an exclusive with the ceo of ebay we just keep it coming stay with us we'll be rightac bk.

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. gm making a big vimts to produce evs. phil lebeau has the details. >> mike, it's a $1 billion investment that general motors leaderbo will be making in its plants that builds the blazer and equinox. this $1 billion investment there

means gm will have five plants in north america that they are converting either partially or fully into the -- to make electric vehicles. this does not sit well with the uaw and it blasted general motors once the news came out yesterday. in a statement the uaw says at a time when general motors is asking for a significant investment by the u.s. government in subsidizing electric vehicles, this is a slap in the face for not only uaw members and their families, but also for u.s. taxpayers and the american workforce keep in mind gm is doing what all automakers are doing, heavy investments in evs in anticipation of a surge in demand look it's supposed to be up to 25 million in annual sales for the auto industry worldwide by 2030 speaking of electric vehicles, neo out with its q1 results yesterday and the stock under a little bit of pressure after it said it's going to see a slowdown in q2 deliveries. why? because of the chip shortage they're impacted like everybody

else instead of growing at a faster clip they're up 5, 10% keep in mind they didn't report a loss for the first quarter, though a narrower than expected one. >> phil lebeau, thank you. i think that is going to do it for us here with "squawk on the street." major averages are all lower this morning for the final day of trading for the month of april, but higher for the month. "techcheck" starts right now ♪ happy friday welcome to "techcheck. i'm jon fortt with carl quintanilla and deirdre bosa today, amazon smashes expectations one more blowout in a big week for big tech the stock had a good week, up only modestly now after the news we will look ahead twitter tumbles, w