may and go away, it may be time to rethink the major averages have fallen one time in the last eight mays. get ready for the opening bell berkshire's annual meeting what warren buffett did not disappoint in his comments on apple and banks and airlines and so much more we'll show you the best moments from the virtual woodstock for capitalists. robinhood is responding, not the guy, the company, after buffett and charlie munger took a hit at robinhood investors calling them casino participants it is monday, may 3rd. "squawk box" begins right now. ♪ ♪

good morning welcome to "squawk box" here on cnbc i'm rebecca quick along with joe kernen and andrew ross sorkin. this is the first trading day of may. looking back at april. the dow was up 2.7% and the s&p was up 5.25% and the nasdaq up 5.4% this morning, you are seeing green arrows again after the gains from last month. dow indicated up 137 points. i saw it indicated up almost 200 points earlier this morning. maybe an hour or two ago the s&p 500 is indicated up 14 points right now nasdaq up 11.5 we should check on treasury yields right now, it looks like the 10-year is yielding 1.649% you are at the higher end of the

range. we should look at the cryptocurrencies this morning. they are all trading higher this morning. an article in "the wall street journal" talks how stocks have been on the run and individual investors hold more stocks than ever before. 40% of the assets from the household are now in stock that data goes back to 1952. crypto also a big winner you can see what is happening here ether is up 6.8% this morning. this is despite the negative comments from warren buffett and charlie munger charlie was very specific saying he does not like crypto at all doesn't seem to be hurting these crypto coins this morning. there were big headlines that came from the berkshire meeting this weekend maybe the biggest was inadvertent. the response to the question if the company is too complex to

manage charlie munger said on the surface was not all that surprising. >> that is absolutely true decentralization won't work unless you have the right culture accompanying it. >> we do >> and dependent on it >> and greg will keep the culture. >> it seemed like a simple comment that greg will keep that culture. for berkshire watchers wondering about succession planning, once warren buffett is no longer in charge, it spoke volumes online speculation that the job would go to greg abel. he runns all of the non-inciden operations that is the thinking among the board of directors it would be greg taking over tomorrow morning if something would happen to me tonight he praised abel who runs the

insurance operations both have been seen in the running for the top job since promoted in 2018 buffett said if, heaven for bid, anything happened to greg, jay would takeover they are both wonderful guys, but the likelihood of the 20-year run in the job is an issue for the board. buffett praised over the gathering in l.a. over the weekend. he spoke highly over tim cook. tim may not be able to innovate like steve jobs has been berkshire owns 5% stake in apple. that counts as the biggest stock holding. buffett was asked why he sold some of the shares of apple last year and proclaiming it one of

the family jewels. >> we got a chance to buy. i sold some stock last year, although our shareholders had percentage interest up because we repurchased shares. that was probably a mistake. charlie and his usual low-key way, let me know that he thought it was a mistake >> yes >> yeah. i can only do so many things i can get away with, charlie i used them up between costco and apple. he's very likely right in both circumstances. it's an extraordinary business i do want to emphasize that in his own way, it's a different

way, but to his focus, we see a lot of managers in a lot of business you are seeing two great ones on both ends here he has handled that business so well >> buffett explained why he sold out of the banks stocks and buying additional shares of bank of america >> like banks in general, but i did not like the proportion. if we got bad results and so far we haven't gotten. we were over 10% of bank of america. it is a real pain in the neck to the bank and us if we go over 10%. i like the bank of america i like it very much. i like the banking business

fine we took that up and we took the overall bank position down we didn't want to go above 10% we wanted to increase the boa position we overall didn't want as much in banks as we had >> part of the concern was just there would be a lot of bad loans because of what happened with the pandemic. much of that did not happen. that was the thinking at the time there is more to get to later this morning we have taxes to crypto to climate change and kansas city southern we will get more on that as we go through the morning >> the robinhood stuff is interesting. i hope they don't have a twitter account. i guess they are suits andrew, tell me. if i don't say anything and taking the side of the robinhood traders. if you don't weigh in, you can

get in just as much trouble as if you said the wrong thing. for me not to be a suit, do i have to say something or tweet something that those guys are bad guys for saying that about the retail robinhood investors what do i need to do so i have all my ducks in a row so i don't get in trouble what if i'm silent am i complicit have you done anything to say they are wrong >> it's an issue you know what you can say, joe you can say confetti when you make a trade is not a good idea. that, i think, you can say you can say that will you get hate mail for that? >> can i tweet it? am i hash tagging if i p put #confetti?

>> i'm curious what becky thinks the idea that robinhood -- warren and charlie made the comments about robinhood -- but they're fighting back. not just fighting back it is under handed fighting back some of the comments made by robinhood about these guys i don't see it you see it all online over the past day or two. >> it's a world we're living in right now. it is. that's why i said i hope they don't have twitter accounts. you think charlie munger cares >> buffett has a twitter account. i know he never looks at it. i'm not sure how the whole thing works. >> he doesn't respond like i do to people who have four followers? they make me mad about my hair you know, if i'm fat >> the thing that upsets me.

if you cannot respect warren buffett and charlie munger they think they're over the hill if you can't appreciate their track record and think that is something to behold and admire i don't understand what is going on in the world. it is upside down to me. >> respect your elders. >> they probably missed out on the most current stuff the record hasn't been as good the last 10 or 20 years. finally got in apple never got in amazon. >> the last 5, 10, 15 years. that is probably the law of large numbers. >> i don't know if charlie read anything about crypto or block chain. it's going to be ugly.

if he is right about this, everything that has been built up around it and companies major companies with cash balance. bitcoin balances now and coinbase all of the stuff that goes on. it must be trillions trillions right now. if he is right, it is one heck of a mess up if it all goes to zero some day. >> they did say that the way the big companies you are looking at today. microsoft and amazon a lot of companies that exist and don't have to put as much infrastructure in it, specifically microsoft, apple and google amazon has a lot of infrastructure and capital they have to spend. talking about how that is a bigger business model. berkshire does not have those businesses they do well not as well as other companies they have a lot of capital in businesses from bnsf to the energy company.

those require a lot of capital expenses and cash to make them work whereas the software companies don't have to spend that money they made a big point. these are businesses they understand and done well with over time. those are the ones they will stick with although, look, apple, the stake they built up is 5.4% of the company. apple shares is like $120 billion. that is the biggest holding. >> none of that $145 billion is going into bitcoin any time soon even with the fed in hyper drive. that would be the mistake that the true bitcoiners would point to i don't think -- that would be a heck of a boost. if it was the opposite and no one expected buffett and munger to take the other side of the trade. that would have been something both those old guys. >> putting it all on the line. >> yeah. you know what?

you know what you can't say to buffett and munger, have fun being poor that might not work in this case you have more? this is great, becky, that they have here. i can't wait to hear the airline stuff. it should be interesting have you been working all weekend? did you do anything else >> i got home late last night. nope i got home late last night >> nice weekend. good stuff thanks for doing that. >> it was in l.a >> she was there this was not remote. this was not virtual the real thing. >> thanks for doing that we're that i nking you. coming up, jobs data in focus this week. the rundown of the potential market moving. the "squawk planner" is next. and later, investor mario

gabelli will weigh in on the shareholder meeting. "squawk box" is coming right back >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. ♪ but entrepreneurs never stopped. ♪ and found solutions that kept them going. ♪ at u.s. bank, we can help you adapt and evolve your business, no matter what you're facing. because when you close the gap, a world of possibility opens. ♪ u.s. bank. we'll get there together. ♪ ♪ ♪ (upbeat music) we'll get there together. ♪ ♪ ♪ ♪ ♪ ♪

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but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business. on this week's agenda, jobs data takes center stage. adp private payroll on wednesday.

weekly jobless claims on thursday and because april is traditionally 30 days. this is coming quickly april jobs report is already going to be here on friday it is a busy week for earnings we will hear from pfizer and t-mobile and lyft tomorrow wednesday, gm and uber and paypal regenero and viacom. on friday, draft kings can't bet on horses on draft kings. weird. and amc networks andrew i found another way, andrew, in new jersey we picked four horses. none of them did diddly. i found another way to add losses. >> another way to lose

>> bobby baffert this is a big lawsuit. apple and "fortnite" maker in court today after attacks on the tight-fisted control over the app store. arguing apple uses the position of power to stifle competition if apple wins, it cements control of the apps. if epic wins, it could overturn the market allowing millions of companies and developers avoid paying up to 30% of sales to apple. cnbc will have coverage of the trial throughout the day i make one comment we just framed it up as the high stakes game and who wins and what happens in many ways, the legal community is looking at this as the ultimate dress rehearsal not for this particular case, but a dress rehearsal for apple

in terms of what happens later with the u.s. government and whether other companies try to bring similar cases. the betting line right now, joe, if you want to go, i don't know if draft kings would do it the betting line is apple wins this case. >> that is exciting. >> apple beats epic now. it is a dress rehearsal for a different case in the future apple is having to play two or three dimensional chess game defend against epic and not show a hand or not make a mistake along the way so the u.s. government or other companies that come after it in the future can bring another case >> that's a great idea i think we have the draft kings guy on a lot lawsuits and anti-trust decisions. let's do supreme court and how they come down on all those things would be fun to bet on, would they not we could actually be doing the research which would payoff on what we discuss if we have skin

in the game. maybe it is not. >> maybe we should do a joint venture with draft kings for legal and financial. >> we do have a joint venture with the other company fan duel nbc? >> fan duel. talk to them there is opportunity >> there is opportunity in the overall space. no doubt in my mind. even on the draft the other night. people were betting on that. you can bet on just about anything just don't bet a lot. twitter shares plunges on friday after the user growth disappon disappointed the stree. and given recent product announcement around twitter spaces we believe that future user growth could surprise and be

better than people thought surprise with the upside that was a drop off last week. $55. i remember it lower. it is performing well for all of the trouble had it causes in the world. andrew, i want to ask ned segal. did you hear the answer? you took it somewhere else my mic got turned off. i wanted to ask how does it happen you should something down and we don't hear anything about it and a month later, you say it was a mistake. the discussion has already ended. it only seems to happen on one or the other side. i'm not going to mention which one. you see how you that works did you hear his answer? we want to have an environment that conducive to both sides being eqqually represented that is not the case who makes the decision to do things on that site? andrew, do you know?

>> they have a board not the corporate board, but a group within the company, that looks and monitors and enforces all of the actions somewhat similar to facebook >> they farm that out to the squad and they can decide what goes on and what can't >> a different type of squad i will tell you, by the way, that cathie wood talked about spaces we did a spaces with ned and the head of hr and head of product right after "squawk. we had a couple thousand people join us after the show it was incredible. people talking to rich greenfield he jumped on you know, you hadthe editor of tech who was out in asia you can see the interaction. there is interesting interplay

we'll see what happens in the future with it maybe she is right we have more to talk about this morning tech company rolling out robo taxes in china it happened yesterday. and a special programming note don't miss cnbc small business playbook on may 4th. most trusted voices in business to help owners overcome obstacles and stage a strong comeback check out the lineup and register at cnbc.com/smallbusinessplaybook >> announcer: this cnbc program is sponsored by ibm. the world is going hybrid with ibm. rts) the world is going hybrid. so, why not your cloud? a hybrid cloud with ibm helps bring all your clouds together. that means you can access all your data, modernize without rebuilding, and help keep things both open and secure. that's why businesses from retail to banking

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"squawk box" this morning. china's first driverless taxi made its debut yesterday no one was behind the wheel at all. the safety monitor sat in the front passenger seat in case of an emergency passengers call the robo taxi using an app they verify their identities and they have to fasten their seatbelt before the car moves. it was forced to brake when the tourists came close to the vehicles to take photos. i don't understand why i feel comfortable with the safety driver in the passenger seat unless they have a breakake whei was a student driver they don't have control of the wheel. >> the brake is a good start good start to have on the passenger side >> does this come with a brake i don't know >> i teach my son.

the center emergency brakes are rare most of them are the electronic things now that you press. i don't think you want to pull it all the way up. you probably go into a tail spin this whole driverless stuff. you know, maybe it is further off than we thought. especially the flying driverless stuff. >> i think flying driverless is going to come first. >> drone stuff where you sit in the middle of the drone? oh, my god >> from all of the crazy people i talked to. everybody seems to think it is easier to do the driverless in the sky than actually on the roads. >> why what about the other stuff and the other driverless flying cars up there why is it easier in the sky? >> easier in the sky at the moment, less traffic,

obviously. also, multiple planes. you are not all in one plane >> it is a problem enough as planes are in the sky without colliding. >> a lot more gravity. you make a mistake if you are at 30 feet and make a mistake, something bad will happen >> i believe if we got elon musk on the show that he would say easier to do autonomous flying than autonomous cars. >> no way am i getting in one of those. >> he can tweet at us and tell us we're wrong >> flying at four or five feet maybe then >> planes are practically autonomous right now we don't want to believe it, but they are >> on the individual thing do you like john denver? did you think he was talented?

remember that flying around in some contraption one mistake and i don't know, an andrew let's not rush this. take our time. take your time when we come back, dr. scott gottlieb will weigh in on us with the sharp covid case drop in the last week and the troubling issue in india and more news on berkshire that greg abel would take over berkshire if something happens to warren buffett. "squawk box" will be right back. >> announcer: executive edge is sponsored by at&t business our people and network will help keep you connected let's take care of business. . oh, we can help with that. okay, imagine this... your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, asap!

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welcome back to "squawk box. last night, india received 120,000 vials of remdesivir from the united states. the fourth flight from the united states to india to help combat the surge of cases. india reported over 468,000 coronavirus cases. taking the case load shy of 20 million. the covid deaths rose by 3,400 the case tally topping 400,000 on saturday for the first time new covid cases are dropping sharply across the u.s that's the good news as of saturday, the seven-day

average of cases fell below 50,000 for the first time since october. hospitalizations and deaths have also been falling and vaccinations increase. more than 00 million people in the u.s. have been fully vaccinated against covid joining us to talk about this is dr. scott gottlieb former fda commissioner and he serves on the board of pfizer and alumina. he is here to talk about the guidelines to get employees back to the office. scott, we're back to the topic de jour to get companies back to get people vaccinated. there are still a number of people not vaccinated or not taking the second shot i know we talked about this for months you know i advocated from a long time that they require it. i'm telling you that i'm starting to hear, by the way, from ceos, who say we might have to have that discussion about

requiring it in part because we are seeing a lot of great uptake, but still enough people out there to make people who have taken it uncomfortable. what do you think? >> i think the survey of businesses who said upwards of 60% were considering mandating at work. we will see what the businesses do when the employees come back in the fall. i think we will continue to chip away and get more people vaccinated over the course of the summer we're about 145 million people who had at least one dose right now. we'll pick up 5 million or 10 million when 12 to 17 age gets authorized we will chip away at the adults. the rate of vaccination will falloff, but if we can continue to pick up 500,000 people per day by the time of summer, we can get 170 million people vaccinated and pick up more as people head back to work in the fall we are not going to get everyone vaccinated

if we get two-thirds of people vaccinated, that is a good level of protection. >> are you of the view once we do get to those levels that the corporations should feel okay mandating it there was a view as you know and we talk about encourage and encourage and see where it goes. is there a point at which companies can say to employees, okay, now you actually have to do it? >> it cuts both ways the mandate will be an issue or if they are in businesses or operations where the cusy are customer facing. i doubt those businesses will contemplate mandates you have enough inn mmunity.

we're talking about people who have been vaccinated and who have not for people who are not providing that evidence, they may have to go through symptom scans or testing. there may be two lanes to work additional requirements that people are not willing to bring forward the evidence a lot of businesses find a large percentage are vaccinated and that takes the pressure off them >> scott, what systems need to be in place to make sure those who are scheduledfor a second dose that are not getting the second dose come back? >> you know, the pharmacies are doing a pretty good job of trying to implement reminders for those patients a lot of times, it is just lost the follow-up. there are some situations that i talked to people who are worried about the second dose side

effects associated with the second dose versus the first the majority of the people coming back for the second shot is high. if you look at comparable vaccinations like the shingles which requires two doses, the number of people who get lost on the follow-up is get into young populations, you will see compliance fall off. that is because younger people know they are driving a more robust immune response from the first dose versus the older individual who needs the second dose for full protection my advice to anyone, if you are young and evidence you derive a robust immune response from the first dose, we don't know the durable response the number of people so far that we have seen not coming back for the second dose is low relative to his ttorical norms. we are not sure those people

will not he investeventually cok >> finally, the situation in india is just so sad and tragic in so many ways. in terms of the approach you think the u.s. and rest of the world should take with access to vaccines how do you approach it at this point? what is the timeline what is the threat not just to india, but the rest of the world? >> we need to do more to get supply in the market there is excess supply in the u.s. market. we can think about how we bring that to india. there are 75 million doses distributed and not used in warehouses by the end of july, we will have 300 million excess doses in the u.s. that we could provide to india and other countries right now. there are othervi availability around the world there is discussion about standing up manufacturing

facilities in india or allowing the intellect property to be w waived that is not a near-term solution there are problems with us not pressing our intellectual property globally, but looking at the pharmaceutical sector to do the transfer like that with a cooperative company. if you are working with an existing vaccine manufacturer in the indian market to do the tech transfer would take six months to a year. if the industry was working together even. for the facility to start the complex vaccine that pfizer would, it will not provide a ne near-term solution in the next six months, we could provide more doses to them that could help them within the next week if we are willing to do it. we are holding on to vaccine that we could be providing to that market. >> dr. scott gottlieb, thank

you. we should have the ip conversation later this week i know it seems to be heating up more and more. bill gates was recently pushed on it as well. it is an interesting story thank you. i appreciate it. joe. thanks, andrew ro robinhood responding after warren buffett calls the platform investors casino participants. and representativeev kin brady weighs in on the biden tax plan stay with us cal: our confident forever plan is possible with a cfp® professional. a cfp® professional can help you build a complete financial plan. visit letsmakeaplan.org to find your cfp® professional. ♪♪

welcome back, everybody. warren buffett had harsh words over the weekend for the free trading platform robinhood. >> they don't charge the customer or anything it will be interesting to see what happens they, they have attracted or set out to attract, but attracted -- i think i read where 12% or 13% of their casino participants were dealing in. i looked up on apple the 7 day

calls and 14 day calls were outstanding. i'm sure a lot of that is coming through robinhood. they are gambling on the price of apple in the next 7 to 14 days there is nothing illegal about it or nothing immoral, but i don't think you build a society around people doing it >> charlie munger weighed in when it comes to robinhood >> well, that is really waving the red flag at the bull i think it's just god awful when something like that would draw investment from civilized man and decent citizens. it's deeply wrong. >> robinhood responding to the comments there is an old guard that

doesn't want average americans to have a seat at the table. so they will resort to insults adversaries of the future and change are those who enjoy privileges in the past and don't want those privileges disrupted. criticisms is important. the generation of inn vvestors s not a casino group they are taking control of their financial futures. robinhood is on the right side of the story in the meantime, cnbc confirmed revenue numbers from robinhood $330 million of payment orders in the first quarter of 2021 guys, this gets to the whole point of what is happening robinhood may want everyone in there and i'm sure that's the case i don't think buffett and munger are criticizing others coming

into the market. they want people to invest the credit siticism is buying a selling on quick order and you bet on the stock over the next week on two. you cannot time the markets. even professionals if you want the wealth to be safe and preserved, that is something done on the horizon. they want to get people into the markets, but not doing it on a quick order jumping in and out that is where they get concerned. you don't make money you lose money >> it sounds like you are shooting the messenger robinhood is just a tool if you just use it to do the same type of investing -- >> warren said do -- go ahead, andrew. >> you should go ahead

i'll add on top. >> go ahead. that's all right >> the only thing i don't believe warren buffett for one second -- for one second is trying to prevent people from having the same advantages as wall street. at all at all >> right andrew, that's the same thing we get from these people. we're protecting the status. >> we've said over and over again. >> the short-term stuff. the short-term reddit. >> even ken griffin has said when it comes though kind of trading, the true day trading, it is not a level playing field. it isn't i think warren buffett and charlie munger have said that more articulately and framed that better than anybody in the world in the past 20 or 30 years they have been writing these letters and having these meetings and talking about the issues

to frame it that way and robinhood saying you are prevented from participating is crazy. it's crazy the level field is -- it isn't a level playing field from the get-go that is what he is saying and warning people about he should be if you want to send me tweets and tell me i'm terrible, that's fine, if you want to send me tweets and say i'm terrible, that's, fine, too. >> i'm not doing that. >> as charlie munger would say, i will leave the criticism to others >> good thing or bad thing or specifically this i've got a lot of others about anything or just this, can i send the tweets? >> you can send the tweets, the best line of the whole thing, becky and becky solicited it i think it was at the end of the crypto -- sort of crypto rant that charlie went on, and he said, but i'll leave the criticism to others. i just laughed i fell off the floor >> i did get tire of -- tired of -- >> tired of what

>> i don't know, the rebels that were in the stock for half an hour and it's squeezing it short. and has no valuation it's not even close to realistic to what they're -- that is gambling and i don't know whether that's sticking it to the man like you're somvour oe yer not. it gets old. and robinhood seemed to play into it. that's fine.

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welcome back, everybody. warren buffer fete dumped his airline stocks about a year ago and this weekend, we learned why. he said it would have been hard for those carriers to get federal aid is a rich investor were involved. >> imagine if berkshire was a 10% holder, if they had been, let's get berkshire. might very well have had a very, very different result, if they had a very, very rich shareholder that owned 8 or 9%

and they didn't have that. so our -- you might not have gotten the same result i would think you probably wouldn't i could see the headlines now. you have seen the headlines on some companies that took 100 million or 2 and didn't need it. some of them gave it back, most of them gave it back but you're actually looking at probably a different result if we had kept our stock. >> buffett also said he does not want to own airlines even now. joining us to talk about it is steven trent, he's an airline analyst at citigroup steven, what do you think, this was an eye-opener, people were wondering why he sold. this is the first time i've hurt him articulate, his reasoning behind this was just berkshire being involved in it themselves, might have prevented some from getting aid. it would have mucked up the

waters, potentially? >> well, thank you for having me here conceivably, someone like him involved would have put risk on carriers getting aid certainly on the surface, buffett went -- not to second-goods the guy, but he went against his own principle that buying is better, and selling is rallying hard certainly, considering the huge aid packages that the airlines received >> so, what's -- again, that's something i had not considered before the idea that the outcome might have changed if berkshire was involved because the politicians might have said go ask your big wealthy big investor who owns 10% of the company, to give you help, instead of us. taking that aside, where the airlines stand right now, what are you thinking about the companies. we are seeing americans start to travel again, at least

domestically which of these companies do you think is a good-bye, buy and whi not? >> sure, for them to say to dump the space because of the aid, that may be true the counterargument is democrats and republicans have very supportive views on this space whether or not buffett was involved would there have been some effort at least help the space? i'm not so totally convinced if he put his stake down to a trickle that they would have gotten any aid you know in terms. space right now, you know, we have been generally constructive about the u.s. airlines. we've become a little less sanguine over that rally over the past few months. so, when we think about the next cycle of recovery which is probably going to be -- and probably, it's going to pick up

but international longhaul and business travel, the names that still look pretty well set up from a risk/reward perspective, delta air lines, united airlines and frontier airlines which i would argue is in a slightly different spot than the other discount airlines in the u.s i think those are the three that look attractive to us. >> stephen, we're out of time. i want to thank you for joining us this morning. good to see you. >> a pleasure. my pleasure. >> andrew. >> okay. thanks, becky. when we return, mario ga gabelli is going to tell us what toad out to him during the big berkshire hathaway meeting

♪ warren buffett and charlie munger talking about everything from berkshire's buybacks, to stocks to bitcoin. we'll tell you what they said. that's straight ahead. sell in may and go away? not this morning as futures kick off the market soaring, we'll tell you market strategy and where you should put your money to work plus, airlines back up and running thanks to the pandemic but complaints are mounting, where your airline stand is straight ahead the second hour of "squawk box" begins right now

good morning welcome back to "squawk box" on this monday morning here on cnbc i'm andrew ross sorkin along with becky quick, back from los angeles, after an amazing weekend with warren buffett and charlie munger and joe kernen. we'll take a quick look at u.s. equity futures the dow looks like it will open 200 points higher. nasdaq 21 points, the s&p 500 up about 21 point joe. >> yeah, i wasn't out there. you said and joe kernen. i'm here >> here. i was referring to becky and her quizzing of the old wisemen. yes. >> oh, okay. okay that makes sense that makes sense oh, i disagree with a lot of things with what those guys are saying, i'm not an evangelist. here's what's making headlines, verizon is near deal

consults media access for apollo deals like yahoo! could be born $5 billion and the apple and epic games begins today it's an monopoly playing the only payment system for those apps and apple says the store is for one of many ways for companies like epic to distribute its game and the stock market's popularity continues to surge according to a jpmorgan report utilizing data from the federal reserve. u.s. households have 49% of their financial households in stocks and that is the highest in record let's get back to becky and all that is berkshire hathaway bec. >> thanks, joe >> you know, the berkshire hathaway annual shareholder meeting over the weekend generated plenty of big headlines but perhaps it's biggest was the inadvertent comment from charlie munger.

>> that's absolutely true, i will say decentralization won't work unless you have the right culture working on it. >> yeah, but we do, we do. and greg iwill keep it closer. >> that comment spoke to the faithfuls remembering to greg a abel here's a quote from it, he said, the directors are in agreement that if something were to happen to me tonight it would be greg who would take over tomorrow morning. he praise the able and ajit jain, both of them had been in the running for the top job since promoted the vice chairman of the company back in 2018. buffett added, if heaven forbid if anything happened to greg tonight it would be ajit it is also age

able abel is 69 they're both wonderful guys. buffett has never really put forth things but buffett went out of his way to say the board has always had a plan. they've always been in agreement. the plan changed over time, i would guess, but the plan has always been there but right now, if anything were to happen, it would be greg abel >> born in 88? >> 90. he's 90 years young. >> and charlie munger is 97. >> that's what i mean, warren's figuring, 10, 12 years from now, maybe it will be greg abel, i don't know >> maybe >> who knows yeah, that's interesting. >> the other part of this, on the culture side, becky, his son is still planning to become the chairman, right? wouldn't that be the -- wouldn't

that be the plan >> yeah, yeah. >> that's what i always thought. in terms of trying to maintain the culture of the company >> yes, uh-huh but i think, you know, look, culture is pretty important. it has to come from a lot of different places and i think berkshire's been very careful about keeping people there who understand that culture. ajit jain, same story. these are people who understand the culture of berkshire i would say the same about todd and ted, the money managers there, too and buffett did make additional comments this weekend just during the meeting saying things, people who stay there are people who understand the culture. they're part of that and they get it they all love berkshire. and that's a big part of how the company operates anyway, there were many more headlines coming from that meeting as well. and one topic that many shareholders wants to hear more about was berkshire's stock

buybacks berkshire has brought in a lot of stock, $25 million in 2020 and another $6.5 million in the first quarter. and critics like elizabeth warren have called market buybacks market manipulation, but charlie munger was having none of that >> well, you're repurchasing stock just a bullet higher, it's deeply immoral but if you're repurchasing stock because it's the fair thing to do, in the atmosphere of how you're investing, it's a highly moral act and people that are criticizing that are bonkers >> topic of dividends also came up berkshire has never paid one but is some shareholders question whether berkshire would change its policy if the taxes were raised to change the capital gains. >> if they jiggle around the tax laws that has nothing to do with

the position we've got a very substantial majority of people that want to us reinvest the money. they're more concerned about it, whether we find something to do with the money, the 100 billion or something and, guys, lots of other commentary, we'll bring more of that a little later. they did get into climate change they did get into their ownership of chevron and defended we'll talk about those issues later on, along with inflation, what they're seeing in the company, too >> great we'll look forward to that certainly will coming up, if you had to cancel a trip last year due to the pandemic and struggled to get a refund from an airline, join the club. now the complaints are mounting. phil lebeau put all of his money on keep me in mind lost all of it we'll hear about that after the break. futures this morning, as you can see are up sharply from the first trading day. yeah, first trading day of the month. we're going to hear from gamco's

mario gabelli inus jt a bit. "squawk box" come right back

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your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business. it's been a spike in the number of complaints against airlines refusing to refund cancelled trips. pretty good about it for a while, i think, phil, after pressure but phil lebeau joins us now

with the look at the latest quality rankings, good morning, phil >> joe, it is required by federal law that an airline refund the money if the airline cancels the flight look, if you miss a flight or whatever reason you don't get on your flight, there's no refuse fund that's offered for. so many flights were cancelled the airlines cancelled the flights. a lot of people said give me my money. well, they didn't get it so quickly. that shows up in the airline quality ratings. these ratings have been compiled for year out of wichita state university they used federal data, mishandled bags on-time arrivals things they can quantify through the department of transportation including consumer complaints. and they quadrupled. the number of people complaining were up four-fold. the number were not able to get a refund or having problems

getting a refund from a particular airline rated as the worst airline last year according to quality ratings was frontier airlines. frontier comes in dead last. i did reach out to the ceo, he said, look, we were overwhelmed at the time. we have since refunded $445 million and amended our policies here's the rest of the rankings, united, hawaii, american, jetblue. the bottom five, spirit, alaska, delta, allegiant, there's 5 through 2, and then southwest. and the reason southwest is number one is in large part because it handled the crisis in terms of refunds and complaints far better than their competitors. in fact, the complaint rate for southwest airlines, about one fourth of what it was for the rest of the airlines and when you talk with the

researchers who have been putting together this report since the early '90s they said it's very clear the culture of southwest came through back in april and may when millions of people were cancelling flights and a lot of those people want reeed a refun. there you have the rating of the worst to best airlines last year guys, back to you. >> phil, i thought all you got was the ability to use that amount of money within the next year on some other flight. you could actually have money -- >> no -- >> -- money credited back to your account i guess, is that relatively new or since the pandemic? >> no, it's always been there. >> joe is back >> you can only get your money if the airline cancels your flight look, if you're on a flight to los angeles, joe, and they say, you know what, joe, we're moving you, or the flight is moved back by an hour or two, you're like, whoa, i don't like, give me my money back

the airline can say, no, no, no, no, we didn't cancel your flight, we will work with you. >> but if you cancel vacation because of covid and you don't need those tickets anymore, you can't get your money back, right, if you do it? >> you know what, what i found, most people when they talked with the airline, they've ultimately gotten a lot of their money back i've come across very few cases where people have said, i haven't. there are some class action suits out there where people are saying, hey, this airline cancelled a bunch of flights and they're not giving our money back i know a lot of people who wanted money back because of a flight >> it's a different situation. i'm talking about if you had plans, if you cancel it, you're not going to cancel because -- >> no. >> but if they cancel, they give you a voucher you got to use for a year >> correct, correct. >> and that's never come down? >> no, joe, that's the argument

people had, did they slow down refund payments back in april and may because they were hemorrhaging cash? that's easy to see that would be the case for a particular airline. but the law is if you say you don't want to take a flight, they'll say, look, here's a voucher. six months down the road, you may want to take it. >> all right, phil, thanks becky. >> thanks, joe when we come back, gamco investors chairman and ceo mario gabelli talks markets and give his reaction to some of warren buffett's comments over the weekend. right now as we head to a break, take a look at s&p's winners and losers we'll be right back. ♪ ♪ i had the nightmare again, maxine. the one with the lollipop— no, the other one.

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as i understand it so, they have to buy a business in two years if you put a gun to my head and said you have to buy a big business in two years, i'd buy one, but it wouldn't be much of one. >> i call it fee-driven buying in other words, it's they're not buying because it's a good investment, they're buying it because the buyer gets a fee and to some extent it's a moral failing, too because the easy money made by things like spacs and return to derivatives, so on, so on, you push that to excess that causes horrible problems with civilization and it affects no credit on the people doing it and no credit on the regulators and voters of the law. i think we have a lot to be ashamed of current conditions. >> can i just say that's why these gentlemen are national

treasures, i'm just saying it because they tell the truth. warren buffer fete and charlie munger speaking out on spacs over the weekend the spac market coming under another potential threat president biden's new tax proposal leslie picker has that story right now. leslie >> reporter: andrew, that's right, bumping the rate that the country pays for capital gains could have a major effect on spacs. the biden plan would double it to 39.6% for those making $1 million. for spac sponsors or ones who manages the spacs, the one that buffett says gets a lot of fees this affects more of their potential windfall they're given founder shares in the vehicle for basically a nominal amount these shares often represent 20% of the spac's capital which can

be hundreds of millions in profit in some cases even more so after the window to try and time any sales at the current lower rate is fleeting the same dynamic may alter the game for companies considering selling to spacs as well given that it's likely the executives would be facing higher taxes although that may be true regardless of who the buyer is regardless, it's a very competitive market for these companies to beselling to spac as those two mentioned earlier spacs have been hit in hard part due to regulatory changes so any change in capital taxes could add salt to that wound, guys >> leslie, i have not focused on this tax issue enough. if you recall a spac sponsor, is that stake considered effective of a carried interest, historically >> it's very similar it's very similar. so in speaking to tax experts it

can be murky some people say it's ordinary income and it should be treated as much but by and large, the vast majority of spacs do treat it as capital gains, because they, basically, have taken these stakes in this spac vehicle. and they have ridden them up to the upside and are able to pay capital gains rates on those profits as a result >> fascinating it's funny you know how crazy i am about carrot interest. i never focused on that issue before thank you for bringing us that story. it's interesting >> yeah. >> we'll have a lot more on the president's plan thank you. and we'll here from congressman kevin brady in just a little he's the house member of the house and ways committee becky. still to come, gamco's mario gabelli will join us we'll get you up to speed on the

markets in the first trading day of the month the futures in positive territory. check this out dow has picked up some steam indicated up by 213 points s&p futures indicated up by 23 after a gain of better than 5% for the month of april nasdaq was up better than 5% up by 5.4% and this morning, another 44 points "squawk box" will be right back. lately, it's been hard to think about the future. but thinking about the future, is human nature. at edward jones, our 19,000 financial advisors create personalized investment strategies to help you get back to your future. edward jones.

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welcome back to "squawk box. i'm dominic chu. here is your market minute some of the memes to watch as we approach the opening bell this morning. first of all, there are a lot more companies these days in the s&p 500 trading well it's not the mega cap and media stocks check out two that track the s&p 500 one of them does it on an equal weight basis where no one stock has a massive influence over the index it's up 16% on year-to-date basis. versus the s&p traditionally, up

12%. you can see just about february, we can see the divergence happening here more stocks within the s&p, not just mega cap and technology doing better in today's market some people look at that as a healthy thing. a couple of companies to watch until premarket trade, estee lauder share, off 3.5% off in premarket trade because medics, skin care maker cummings out with earnings better than expected they did say a lot less people are using cosmetics because of the virus family but skin care products growering watch that dynamic, near highs for estee lauder pulling back a bit there. one other place to watch, we will see as the premarket gains hold for berkshire hathaway. a new high, berkshire hathaway shares hup 1% in premarket trade. if it carries over, 52% in that one-week span for berkshire is a big mover here record highs, outperformer on

the s&p on yr--deatoate and year basis. keep it here we have much more in "squawk box" coming up after the break

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♪ well, the stock, we've had a lot of people look at the casino in the last year you have millions and millions of people have set up accounts where they day trade, where they're selling puts and calls i would say you had the greatest increase in the number of gamblers, essentially, you know, there's nothing wrong with gambling and they got better odds if they played the state lottery but they've had cash in their pocket they've had action and they actually have -- you know, have a lot of good results. and if they just bought stocks they'd do fine, and held them. but the gambling impulse is very strong and people worldwide and occasionally it gets an enormous shove. and conditions leave this place

for more people are entering the casino than are leaving every day. and it creates its own for a while. and nobody tells you when the clock is going to strike 12:00 and it all turns to pumpkins and mice but the -- the -- the competition is playing with other people's money, or whether -- and if they're playing foolishly with their own money, but the business stuff is with other people's money, they're going to beat us >> that was warren buffett speaking at this weekend's berkshire's meeting talking about the flood of new investor accounts and what that might be doing to market levels at this point in term of valuation joining us is longtime berkshire sharehol hholder mario gabelli mario has been attending

berk berkshire's meeting for two decades. great to see you. >> great to see you, well done in that conference yesterday great questions and four hours, wow. >> thanks, mario what was your takeaway what do you think were some of the most important points made by buff felt and munger? >> okay. let me wear my lens of analyst, portfolio manager and one that focuses on intensity of companies. first, he koched that he's not going to do it again, no quarterlies, no guidance, read the annual reports, don't read the reports, liked investors that read those put them in some other bucket first, let's talk about ajit, what happened there -- ajit and warren have a little interesting challenge in regards to the impact on insurance costs of the pandemic for example, ajit said, hey, today the reserves of our company are $1.6 billion but for the industry, 25, 30,

they go to 100 billion warren said, well, why don't we raise our reserves so, that's something in process. >> i don't know that he said -- i don't think he said raise our reserves i think he said the industry should raise their reserves. >> i agree >> he was clear he's not going to be in the top five. >> ajit did not say that it's obviously logical, i think he will raise the reserves on the industry's three times rate where they are currently and that's the unexpected, unintended conventions of what happened in england. the second is, float isn't as important. warren is making zero on float on 150 billion in rough numbers. and before he was making, you know, 150 million or 200 million a year so that's kind of interesting. a third, i think the notion that geico is going to become much more profitable relative to progressive over the next few years, you know, that's background the second part is obviously

greg abel. greg hit the subject of the environment. he noticed how they were transitioning out at an aggressive rate, getting out of coal, going into transmission. if you want to do climate control, you need wind, solar, renewable as, in other words transmission and transmission is the emphasis he was putting on how much money they're spending and it was echoed in the annual report already. in addition to, the other comment made, maybe you touched on it earlier was the notion of the railroad when warren said there's four major railroads in the u.s., two in canada and going after ksu which would make it two -- three, somewhere in the background, i can't stop thinking about the arbiters thinking about this. whoa interesting 0 than aspect, in addition, what you had and the big takeaway for me was the

notion of costs. cost pressures that greg mentioned consistently and the ability to maintain gross margin which is unlikely but the gross margin profits will arise but the margin percentage may be declining. but because of the robustness of the economies that they talked about, they'll do whquite well and the 10q that was released prior to your comments and questions indicated that pcc had an extraordinarily unprecedented q1 those are some of the dynamics and thenfrom warren's point of view, inflation, what happens, what are interest rates going to look like? what are the big tech stocks going to look like it's a crazy day for tim cook. the notion and then saying if interest rates stay where they are, those stocks are worth while

the premise will be that things change it's always good to see charlie munger back. >> yeah, it was good to see charlie, obviously, he hadn't been there the year earlier, put together quickly, in the height of the pandemic. everybody was out in l.a. to accommodate charlie, it was nice to see let's bring up some of the things mario the float being less valuable. ajit also brought up the idea there are more people in the game doing some of those big reinsurance bids than used to be the case it used to be very difficult for people to come up with $1 billion or more in coverage quickly. now, there are more conglomerates that they compete against in that area it's tougher on the pricing, too. >> yeah. those are clearly the dots i mentioned. and clearly, those with -- are an important elements in the total mosaic of trying to figure out the insurance business

>> geico getting more aggressive and looking for ways to increase market share and goal tougher against progressive which has been coming up behind them. that was an important point with the insurance company, too how much of that did you focus on did you take away? >> no, it's not that big in terms what we do we don't cover the insurance industry with a intensity. we don't have a good coverage on that but the notion that telematics is going to be looked at with greater focus and help geico but the other part was the giveback i think the q1 giveback was 400 million. and then how much it was on a cumulative basis and then going forward over the next 10, 12 months, incrementally geico will not be there and have that year-to-end comparisons. those are details. so, those are elements >> the inflation conversation was pretty interesting they talked about, as you mentioned, greg abel mentioned

how their input costs were going up and that was something they had to deal with i think they both made the point, both greg abel and warren buffett that the costs they can pass on are going up that makes you wonder how much can stick, how much is transitory we've seen the same with procter & gamble and coca-cola saying they're going to raise their prices >> yes, they will. $500 with 50% margin, i'm making $50. but if the costs go up 20% on costs-to-goods sold, you know, and revenues are constant. but revenues are going up substantially independent of past due so gross dollars will do well. but margins to those company that can maintain the margin when they pass through costs, those are the ones i like to focus on, and that's what we

tonight do so, will they stick? yes. i think they will. i think the other part, wages with the ability to attract quality talent and keep quality talent will task the raise in wages. and the other part, warren obviously saying i'm not going to talk about taxes. >> right, he avoided that subject. charlie munger jumped in on taxing and said he thought what the states are doing right now in terms of california and other states raising their taxes is crazy because it drives away the old people who are good citizens and pay taxes. >> well, yeah, there's an element on that part with regards to the sole tax dynamic. but california does have no state tax, as far as i remember. but the states that have an estate and high taxes. but the other point warren and greg abel talked about where do i locate a factory and why how much unfunded pensions are

there in states, why should i locate a factory over that state if in fact over the next 10 or 20 years that factory isn't going to be moved and they can basically take part of the capability of that factory when you think about austin, texas, and florida, parts of carolinas, you can see where the movement of factories are going. and that's the kind of read-through message i got from that comment on taxes. >> charlie munger made a comment at one point that made people think that greg abel might be the next ceo buffett has since confirmed that to us. that is the thinking of the board. that the board has had a unanimous plan in mind right now, it's greg abel. what do you think of that as longtime shareholder >> that's great. warren had an envelope and in that envelope was the name of the person he would pick and the

board held it. for him to open the envelope now is kind of an interesting dynamic. warren is only ten years older than biden, i can't assume he's going to retire. and the four hours yesterday was a wonderful display of intellect and energy so there's time to go. but he did open the envelope >> i don't think he did it necessarily intentionally. i wouldn't read too much into the timing of it buffett actually told me they've always had a plan. it's just the world's page a lot more attention these days. >> you know, over the last ten years, becky the last 20 years, you know, the notion of this successor, his retirement. the notion of splitting up the company. the notion of paying a dash dividend, you know that invariably comes up. so, i'm not sure i agree or disagree then we talk about the mechanics of the stock market. the spacs, and the only silver lining, i have to echo a lot on spacs, except if i buy an ipo, i

can't lose money because the money goes into a box and i can claim my share of that box back at the end of the two years if there's a deal or no deal. but on the other side, the silver lining to spacs, we as a country, 36 months ago we were talking about the shortages of public companies trading we're bringing out a slew of public companies, some of them will turn out to be winners just like in 1999 and the other part, obviously, is charlie and warren think about stocks in terms of price and valuations and most of us think about the 1999/2000. and then go back to the nifty 50 they go back to that era of the early '70s so, you know, there's a lot that can go on. the notion of price being an important determinant of what they're willing to pay for a business >> mario, you're a great investor yourself. what do you think of market valuations where they stand right now, especially where you

consider where interest rates are and what you consider your alternative if you're worried about inflation and keeping money in cash? >> well, i'm not going to keep money in cash. my mandate from wealth clients i'm not a wealth manager yet in migrating a public company into that methodology we're like the hospital for special surgery. you know, you have a knee or a hip or some other dynamic. we take care of it, we're the best so, in terms of equities we're saying the economy is extraordinarily robust gdp in real terms is one thing but my company's report in nominal terms. real gdp and inflation 10, 11% growth rates in the economy. in addition to that last year, everyone became sensitive about costs. even though costs are rising, they did examine costs then they deferre red capex. now the bottom end, reading end

reports you get a lot in regards to where capex is going, how it's going to increase i'm optimistic about the economy. and then the first half of 2022 will be strong because they're prepping for the election and midterms and the notion of infrastructure, and the notion of working on a climate, with regards to transmission. the notion of putting money into making sure that companies stay on shore or reshore to united states, those are important elements okay just, wages will rise substantially. on top of that, european markets will improve after we get the shots in the eu. year-to-year comparison there china is doing well 18% of the world's gdp. united states is 23. europe is coming back. you'll get emerging markets like india and brazil coming back you've got to look -- the latest in chip shortages will help the auto industry in 2022. you're going to have a pretty

robust economy going into the first half of 2022 at least you can perceive that in december of this year >> optimistic thoughts we like to hear it we always love to hear from you, thanks, mario. >> one last thought when you're buying berkshire 1.525 shares at 410,000, you're getting 1/5th of the company's economic risk in apple. so he's got a barbell out there. >> thanks. >> hey hello to joe. >> hello, mario. mario called the greatest call in history, people are going to have pets and spend money on them, 20, 25 years ago it came true stocks, what a year, 25 new highs already for the s&p.

so, what do you do in may? do you sell in may and go away after we discuss it after break, we head to break, check out cryptos if you would, if you're in up 3,000, up 300% compared to bitcoin's paltry 99% there's dogecoin, 38 cents squawk pod is a webbee nominee for the 2020 justice protests and ceo response. >> in the long run, what's in enlighted economic self-interest for all americans to feel like they're participants in our economy. >> support power podcast and vote for the people's voice award. go to cnbc.com and vote squawk

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we talked about it just about every year and that is the old add damage you that sell in may, go away, always comes up, a little different this year because it wasn't april 15th. these things are thrown off taxwise. but according to lpl financial, the s&p returns 1.7% on average between may and october for those six months

and it returns 6.8% from november to april. in the past six months, the index is up close to 30% joining us now to talk about what to do, with this in mind, ryan dietrich, senior market, and rachael, a cnbc contributor. ryan, you also point out, once again the caveat is, i don't know what historical trends necessarily mean and a lot of times they're meant to be broken but whenever the s&p's up 5% in april it tends to do really well in may 9 out of 10 times. and that's the case this year, because april was a big month. >> you're right. joe. i mean, you think about it should be called sell in june if you ask me it if you look back at the last eight years, may's been higher in an election year, may is

historically strong. when april is up a lot, may has been higher eight out of ten times. 80% rally, the calendar as you can see more of a warning sign summer months, low volume, more volatility just overlaid this bull market with the ones we saw from 2009, 2010 lows that one we had -- almost iden identical, that one had a 16% correction in summer months. may only get 15 or 16% with the stimulus out there and the calendar is a near-term warrior here >> calendars are one thing, but it doesn't matter what month or day it is, if you just look around and try to figure out sentiment, and, you know, just how far we've come and maybe how some of the pockets of speculation that are troublesome, so i don't even know if it matters that you need to know what month or day it is. but, do you feel like maybe this year, that it may be a better idea than until previous years

to maybe lighten up a little in may. >> well, good morning. i will tell you, this morning alone, i've read four different notes on sell in may so, people, it's on the topic, obviously. and the top of mind on investors. look, seasonally, it's always a sluggish period, may, june, july, summertime i feel it my own portfolio the first and fourth quarters are strong in the middle of the part of the year, it's more challenging. look, joe, it's really tough to market time. and at the same time, we have record liquidity and too, up 26%, we know that story. any pause or dip gets bought, especially when you think about the fundamentals, right? the economy is absolutely boom 6.4% gdp growth. we're probably going to double that in the second quarter personal consumption at 10.7%. personal income, i've never seen

a number like this in my life, up 21.2% there's so much pent-up demand on the consumer side manufacturing is absolutely humming. by the way, earnings are up 51% year over year i get it, easy comparisons, but earnings are coming through. but when i think about the fundamentals and seasonality, if we do get a pause, let's make a shopping list and i have a whole bunch of names i would be buying into that weakness >> yep sounds like buying the dip would continue ryan, i think stephanie made a pretty interesting point i've seen bandied about, in the most despondent days when the market was showing weakness and we were most concerned and then it came back with a vengeance. we kind of said, well, all of the reeaching good news is already reflective how do were live up to this? and it has and that was understated what

the actual pent-up demand was going to be, and we're seeing it now. so, it hadn't paid everything forward. there was a lot more to go, three, four,five months after the lows we saw. and here we are. so, i don't know, does it last forever, ryan? and i can't imagine that some of the stuff we're hearing out of washington doesn't become a headwind at some point are you worried about any of of these things, or you just don't think they're going to pass? >> no, there's always worry, we don't think it will last forever. i agree with everything that stephanie said, three and six-month returns on the s&p are actually negative, right the truth is everyone knows we've opened up. everyone knows how good things are the innercontrarian knows it could be good, maybe after an 80% rally, heaven forbid a 10% correction like stephanie said we're 50/50 here last year, we liked growth it's even opportunity on both

sides get the shopping lists ready because there will be a buying opportunity. >> so, both -- you agree with stephanie, this is not a sell in the strength it's a buy into weakness what do we do to poor ryan i don't know, that's weird what is that, we covered him up. he looked fine or we had a technical glitch there, ryan. nothing personal nothing personal thanks, ryan ryan, you're in chicago -- oh, he dropped wow, we had a major problem. ryan's already gone. see you later. coming up, when we return, joe, we've got congressman kevin brady who is going to be joining us to tox about president biden's tax plan we'll talk about that, next. plus, more reaction from the big berkshire hathaway annual meeting over the weekend where becky quick quizzed the oracle and charlie munger together. we're going to break dowthn e biggest moments with

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away and warren buffett speaks publicly for the first time in a year we're going to bring you all of the highlights from berkshire hathaway annual shareholder meeting. and tesla's ceo elon musk wears another massive payday we're talking 11 figures that story and so much more on the way as the final hour of "squawk box" begins right now. good morning, welcome back to "squawk box" here on cnbc i'm joe kernen along with becky quick and andrew ross sorkin we've got equity futures solid this first trading day of may. up 22 points, the s&p indicated, 25 new record for the s&p and the nasdaq up now 40 points with

treasury yields, within the range. within the friendly range of 155 to 165 1.65 on the ten-year and got some breaking news, i guess, right out of the box, andrew >> we do joe you know, this is history because we've been with these company, verizon selling media assets including aol and yahoo! the price tag, only $5 billion it had been reported that the deal seller assets to apollo global was close verizon took a $4.6 billion writedown in 2017. but if you got at&t going one way withed me in terms of hbo max and doubling down on media, verizon has now completely gone the other way. of course, we've watched the history of yahoo! over all of these years and aol as well,

with tim armstrong jerry yang back in the day, marissa mayer. it's been quite a history. to see them all separated all over again, we'll see. i'll be very interested to see what happens with an aol or yahoo! in the future >> it was a coup to tim armstrong. there are specific assets on the advertising side that supposedly made sense but aol and yahoo! were never aol and yahoo! again. i guess, i don't know whether that was a mistake or not for yahoo! certainly paid off for tim here's some of the other stories on investors' radar today. an epic federal and trust court battle to watch, we say epic because it's apple versus epic games. the fortnite maker says that apple's app store is an illegal

monopoly built on taking 13 to 15% cut of inactions epic tried to get around that, it led to fortnite getting kicked off even as lawmakers considered a new regulation, a judge, not a jury will decide on the case we're keeping an eye on the shares of moderna, the covid vaccine maker struck a deal to provide 500 million shots to lower income nations through the united nations and a program aimed at the restaurant industry. sba, small business sad station, so-called restaurant revitalization fund will start accepting applications for $29 billion in grant money $29 billion is part of the nearly $2 trillion covid aid

package that's ancient history became law last month. it's like brewster's millions, we're trying to spend that we've got a lot to spend we're still trying to do that last 2 trillion which is not easy, becky. hopefully, this will help restaurants that do need money a lot of money still left in the prior programs as we're ramping up new ones. >> yeah, but a lot of these restaurants are thinking long time coming they've been riding this out through the last year and going through all of these iterations >> customers are back. maybe they'll say no thanks. >> maybe anyway, the berkshire faithful weren't able to make the trip to omaha this year but that didn't stop chairman and ceo warren buffett from holding the company's annual meeting, hours' long q and a session virtually again this year. many estimates were interested in the $4 billion stake and chevron taken in 2020.

and they wanted buffett's take on how it should be viewed in light of climate concerns. >> it's a very tough time to decide whether a company is benefitting from society i think chevron has benefited society in all ways and i think it will continue to do so. we've got heightened problems for a long time and we'll be very glad we've got them but i do think the world is moving away from them, too that could change. i don't like making the moral judgments on stocks. in terms of actually running the businesses but there's something about every business that, you know what you wouldn't like and you know, meat packers -- you know, it's -- you expect perfection, you know, in your spouse or your friends or in companies, you're not going to find it. >> that answer, by the way, was

in response to a question that asked pretty directly if we should be looking at chevron and other oil companies in the same way as the tobacco companies and buffett's take was, no, it's tough to make the judgment calls. buffett also addressed the ongoing bidding war for kansas city sevin which is taking on canadian pacific offered $25 billion. also specifically weighed in on whether he thinks the valuation offers worth it. >> you know, we looked at buying cp everybody looking at everything. and we would not pay this price. and it implies a price for the nsf which is even higher than t the up is selling for. but it's kind of play money to some degree, when interest rates are this low from the standpoint of cp and

cn, there's only one case of kc southern they're not going to buy us, they're going to buy the u.p the juices flow. >> playing with somebody else's money. >> yeah, somebody else's money and you're going to retire in five or ten years, they're not going to remember what you paid, but they remember whether you built a large system and the investment bankers are cheering you on with every move. saying you can pay more. moving the money around, spreadsheets are out, fees are flowing. >> buffett and munger were also asked about the biden administration's new tax proposals. buffett said he preferred not to get into politics speaking for berkshire. but munger shared a view that it's probably a mistake being anti-capitalist. he was asked why he continues to live in california with the state's high taxes >> i have frequently said i

wouldn't move across the street. with 500 million in taxes. so i have -- that's my personal view of the subject. but i do think it is is stupid states to drive out their wealthiest citizens. the old people that don't commit any crimes they donate to the local charity, it's -- who in the hell would in their right mind would drive out the rich people? florida, places like that are very shrewd, and places like that are stupid. it's contemprary to the intereso the states >> we were able to spend more time with munger and buffett about their friendship and partnership as well. we'll bring that to you later in a prime time event later this month. joe and andrew >> that's fine, i'm looking forward to that. when we come back after

this, though, the white house is betting it can turn the current tax debate in washington into a winning issue. we're going to hear why. and then we're going to talk to congressman kevin brady, a member of the house ways and means. and i want to hear what your thoughts are on that ted cruz op-ed in "the wall street journal. saying republicans shouldn't take money in corporations as we head to break, take a look at the price of cryptocurrency, ether this time, just broke $6,000 sitting the a record high. four astronauts splashing down in the gulf of mexico on spacex and it ends the mission critical to watch it happen. stay tuned you're watching "squawk box" on cnbc offers investors a broader view. ♪♪

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we do this, together. bounce forward, with comcast business. welcome back to "squawk. hiking taxes has historically been viewed as a liability for the party leading that charge but that may be joining. ylan mui joins us with more. >> well, andrew, the biden administration believes it's got a winning hand in the fight over taxes. we have seen copies of internal

white house memos outlining the argument that this isn't just about paying for infrastructure and education. but, in fact, it's primarily about what needed done as one of biden's senior advisers calls restoring basic guidance to the tax code a recent monmouth poll found nearly two-thirds of americans support raising taxes on corporations and the wealthy and a white house memo claims that billionaires that warren buff felt and bill gates believes, but clearly their pass is more nuanced that how much can you wind up paying, let's say you're making $2 million, your tax bill would be $42,000 higher from the increase in the top rate to 39.6% but if you're $2 million was all in capital gains, you get hit a lot harder your taxes would go up by $196,000, since gains over 1 million would be taxed as ordinary income. now, that is just one person apply that across the top 0.3 of

1% here's how much biden plan is projected to raise over the course of a decade $430 billion from the increase in cap gains and getting rid of stepped-up basis 112 billion from raising the top rate $339 billion from closing loopholes and 700 billions from enhanced irs enforcement guys the poll numbers that the white house is be looking at do show a sizable number of republican voters supporting the plan they're hoping that will convince republican lawmakers to get on board as well back over to you >> fascinating, elan thank you for that we're now going to continue this conversation with one of the people in the middle of it, joe. >> thanks, andrew. joining to us talk more about the potential for higher taxes is a way to fund president biden's infrastructure plans congressman kevin brady, he's a member of the ways and means committee and one of the key authors of former president

trump's tax cuts and jobs act. congressman, it's always a pleasure to see you. so, we hear about compromise just can you give us what your assessment is, honestly? and i'm not saying you're dishonest. but, you know, let's just -- you know, let's just -- >> always a good way to start. >> let's find out, are republicans going to compromise? and is there any willingness with the biden administration to compromise with republicans? or is it not going to happen and then let's just talk about what they can actually do, given the make-up of congress. >> well, first, thank you for your kind words. it's always great to start the interview on the honesty stuff so, one, on the compromise side of it, can we reach common ground on the infrastructure part absolutely it's always been a bipartisan issue. there's no reason for us not to, honestly, i think republicans have said get us to the table. let's have that conversation

on the tax hikes, though, look, the president has failed to make any case for why taxes should go higher than 21%. obviously, given the state of the union joint address i was at, i counted under over 600 million u.s. jobs lost because of the policies the president talked about so, we shouldn't be funding infrastructure on the backs of american workers, certainly. i think when you look at the polls, you know, usually, if you ask the question, you know, which of these taxes do you like, it's always the ones on someone else but two weeks ago, someone asked a different question, how should you fund infrastructure? should it be with tax increases? should you find funding within the budget or pay for it with debt? only a few, 25% said we should raise taxes. they really said, look, take a look at the budget first to have find out where we can fund these

and that's where i would go as well >> the -- do you think -- would republicans prefer to deficit spend on the infrastructure? congressman. >> i think we would start with how we make better use of the budget we have for example, there's about $600 billion lost to fraud in the child tax credit, earned income tax credit most recently, the c.a.r.e.s. unemployment was almost $200 billion. we ought to stop and recapture and secondly there are a number of tax provisions, joe, like the activity bonds and others that used to be devoted to infrastructure and regional industrial development now has, you know, mission creep. very little of it actually goes to that. there are different ways we can approach that to drive funding for infrastructure final point, u.s. lags the rest of the world in attracting private capital in infrastructure for some reason

i think that is an area that congress needs to get serious about. i think private capital, rather than tax dollars, can help us fund basic infrastructure. maybe not fill potholes, but there is a lot of that infrastructure plan that we can bring to the table >> congressman, let's say that we decide that a republican society won't go along with raising corporate taxes. so we're going to go after individuals. you keep hearing the fairness word bandied about and we heard anita dunn saying we need to make the tax code fair so if you ask people, reportedly, they think if you work through the end of june for the government, maybe you get to keep whatever you make after that 50% seems to be high and a lot of -- not billionaires, but just people that are doing pretty well are in a 55% bracket right now what really -- what you really hear about fairness are the very wealthy people that for whatever

reason have all of this money that isn't taxed whether there's been stepups or hasn't paid capital gains, but you always hear that they're paying 7% or less than warren buffett's assistant. you always hear these anecdotes. is there a way that republicans would want to approach that to try to tax some of is that since -- >> so -- >> go ahead. >> yeah. so i'm not sure those anecdotes are accurate right now, we've got 1% of the taxpayers that shoulder 40% of the tax burden in america. we have an extremely progressive tax code and that 1% pays more than -- >> you say that's not fair, congressman. you just heard saying it's a trick. we hear constantly it's not fair that it's 1% paying. >> yeah, but, joe that is more than 90% of the taxpayers combined that's one two, i really take issue with

capital gains and other issues being loop holes or unfair because the truth of the matter is, when you earn a dollar, after taxation, you can spend it you can save it or you can invest it. that last part is the riskiest but it also has the biggest impact on the economy. i think that's why -- i know that's why we encourage more of that, because you more than likely are going to lose some of that investment. the other issue here, i don't think we've figured out, yet, how dangerous weakening investment infrastructure is on the u.s. when you double capital gains. so, in other words, the government has almost as big a claim on the earnings as you do. when you expand the obama investment tax to small businesses, when you tax inflation, target entrepreneurial income and punish in the local community, i think that's a significant impact on communities on working families i take issue with those

loopholes at all >> congressman, i'm curious what you think of what seems to be some changing bedfellowbedfello is ted cruz, in "the wall street journal" over the weekend. for far too long, woke ceos have been fair weather friends to the republican party they like us until the left digital pitchfork comes out. he said these needs to be called out, cut off and singled out and saying next time we won't look the other way on coca-cola's $12 billion in taxes owed next time when major league baseball lobbies to for its multibillion we're going to say

no thank you and also said he's no longer going to take corporate tax money. but it changes the dynamics what he's saying we're talking about right here >> well, a couple parts, andrew, first, look, i think corporate america and ceos are incredibly talented and certainly can take care of themselves and i may disagree with some of those issues but the other key issue here is that corporations don't make contributions their employees do i know in my district when my energy -- workers and energy economies airlines, manufacturing, you know, i like the fact that they backeded me because i'm championing their paycheck in job us so, look, i know there's some tensions right now i understand that. but, look, at the end of the day, we're not fighting for the ceos we're fighting for their workers, their customers and certainly the communities they are invested in in >> what what do you think about that larger issue and what

appears to be a larger rift between the business community and the republican party >> well, i always look at where we -- where we agree and certainly, it -- look, the 2017 tax reform, whether you like it or not, drove paychecks up drove poverty down brought a lot of jobs to manufacturing and research back from overseas. all of that benefited blue collar, low-income working families that's where we agree. that's where we're fighting, in my view, fighting for fairness for american workers >> so, where are we going to be, congressman, in terms of higher taxes? we'll go back to the 39.6 which is a weird number for some reason -- >> yeah. >> do you think we go back to 39.6 or 25 on corporate taxes? or do you think it's all done through reconciliation when it's all said and done? >> you know, my first point would be, this is not a done deal by any means. these are dramatic increases in

taxes that have real impacts on jobs here in america there's no question in my view this is going to sabotage the jobs recovery. it will drive jobs overseas. even a 25% rate only makes america nearly dead last competitively and when drive jobs overseas. so, i'm not sure we should be compromisi compromising, making america dramatically less competitive than our global competitors. i think there's going to be a real fight over these tax increases. and i predict at some point, i'm hopeful there's a middle ground we find, both on infrastructure and a different approach of how we pay for it. >> well, that was a very honest discussion that we had with you. giving you kudos for that. you know what, even more importantly, congressman, a fair discussion because we're all about fairness we hear that "fair" word a lot, no one defines it, but could we please be more fair.

>> yes, sir. >> just keep that in the back of your mind at all times fairer >> i'll do better. i'll do better >> all right, congressman, thank you. we'll see you later. >> thanks. >> becky >> thanks, joe when we come back, allianz adviser mohamed el-erian will share his take aways from berkshire hathaway's shareholder meeting. and we'll talk about the achievement of lien musk that is vaulting them higher than it should be. "squawk box" will be right back.

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welcome back to "squawk box. this morning, take a look at the futures right now. we're looking at the dow about 200 points nasdaq looking to open 47 points higher the s&p 500 looking to open 23 points higher. joe. coming up, mohamed el-erian is going to weigh in on all of the news from berkshire's annual shareholder meeting. we'll talk markets and much more "squawk box" coming back our podcast squawk pod is up for an award we ask you to go to cnbc.com to vote voting is open until may 6th we'd love your support

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we have been talking all morning about this weekend's berkshire hathaway annual shareholder meeting. here's what ceo warren buffer fete had to say about inflation. >> we're seeing very substantial inflation. it's very interesting, i mean, we're raising prices -- people are raising prices on us

and it's being accepted. i mean, it's not -- we get -- well, you know, take home building i mean, the cost of -- we've got nine home builders in addition to our manufactured housing. and operation which is largest in the country we really do a lot of housing. the costs are just up, up, up. steel costs. you know, just every day they're going up >> joining us right now to talk about inflation, the markets and much more is mohamed el-erian's he's allianz adviser and president the queens college, cambridge. mohamed, this inflation message could be more stubborn than the fed is indicating. that's something that you've been talking about for a while, what do you think? >> i have, warren buffett --

>> where do you think this leads, mohammed? do you think sthis is the situation that the chairman jay powell said inflation will pass. we'll go through a time period of it, but then it will pass but when you start to hear berkshire hathaway will be increased from the customers, their suppliers. they're passing on to customers. you hear coca-cola, you hear procter & gamble talk about raising prices once prices tend to rise to consumer goods it generally doesn't roll back quite as quickly. what do you think? >> the fed is spreading itself into a corner. all of this suggests you have an open mind. you cited examples i can cite examples. warren buffer fete talked about

very substantial inflationary prices and prices are sticking you've got to keep an open mind. unfortunately because it's hostage to a framework that is outcome-based, i think the fed has to choice but to insist it's transstory but i mere this is not transitory. >> it's almost impossible to think of the fed raising rates at this point and that's traditionally how you fight inflation. what zhao think they should be doing, particularly when have a dual mandate and the other half of that mandate is to look at unemployment which is high right now. >> the inflation marker is proving better, most people expect we'll get below 6% unemployment rate this friday with 1 million new jobs created. the fed didn't expect that until the end of 2022. so, we're doing much better on unemployment than the fed itself expected a year ago. add to that importantly, that we have issues of financial stability to think about

and i think what the fed should do is follow what the bank of canada did last week stop tapping brakes slowly get out of this -- we're not thinking about thinking. start thinking and give a clear guide as to when it is you will start tapering a little bit. look at what the bank is going to do this week. this is going to be interesting. will it follow the bank of canada or the ecb and the fed? that's going to be another important indicator because it's not just a u.s. issue, it's become an issue for countries as a whole. >> yeah, that's what brinks us to not the -- the 64 million dollar question, not the 1 billion dollar question, this is the gazillion dollar question. what happens to markets in this environment, when you see inflation rising you don't want to be in cash, your because your cash is worse less and less over

time when you look at what happens at the market it's and what would happen if the fed raise rates that leaves you in a big mess. what do you tell people to do, mohammed >> what you say, first is important for the fed itself because if the fed is forced to slam on the brakes later by not moving early enough that is bad news for the economy that is bad news for the market. so, you don't want to be in a situation where the fed is late. the market sees the fed as being late the fed has to slam the brakes then we get all sorts of economic and financial mess. that's why it's important for the fed to be more open minded about the nature of inflation. as to what would happen if we start now, it may act as a bit of a headwind, but, remember, earnings are very strong the economy is to quote warren red hot. so there's a lot of compensating factors. my concern is being so close-minded about the nature of inflation, we may end up with

both a policy mistake and a market action when we don't need to we can avoid that if the fed were to be more open-minded. >> you know, mohamed, we watched an interview with the washington economic club over the weekend of jay powell. and he's very thoughtful about these issues it's hard to imagine that even though he may not be saying this publicly, he's not keeping a very close eye on this he's somebody who understands markets. he understands how these things happen do you think that this is more a game of not wanting to spook the markets by talking about it? but keeping an eye on it, nonetheless? >> i think that's part of it and the other thing, it's that framework. so back in 2019 when we did have a deficiency, we did have that in 2019. back then, and we had it for at least ten years. the fed decided to change its framework. to go from forecast-based to outcome-based. and then the whole economic

paradigm changed it literally changed completely both on the demand side and supply side. now they're hostage to a framework that made sense back then but doesn't make sense today. it's credible because of the stability at stake, just embraced that framework are you going to come less than two years ago later and say i was wrong? no they're trying to stick it out and hope it's transitory it's more hoping than forecast right now, they're hoping it's transitory, because otherwise, they also have to modify the monetary framework and it's still called the new monetary framework because it is that new >> the only thing i'll say to that is being outcome-based, rather than forecast-based, at least you know what you're dealing with is real, because historically speaking, it's pretty tough to call the economy fed forecasters, haven't been great at it. fed forecasters haven't been great at it and other

forecasters. if you're looking at it based on actual numbers, the outcome you're seeing at least nobody can argue, yeah, you're doing this on something that's a completely false set of facts you're looking at. >> that's true remember, every economic student learns that monetary policy acts with variable and long lags. so it doesn't act immediately. so the concern is if you become too outcome-based, then by the time you react it is too late. and it's this notion it's too late is worse because it can do two things can end up derailing what we need is a long inclusive, strong recovery and it could end up disrupting the markets. so, that would add another headwind to the economy. that's why you have to be anticipatory in acting and we are often reminded by it by other economists. and i would remind you, too, that every time the fed has been

late and some to slam the brakes, it results in a recession. and the very last thing we need right now is a recession >> in other words, when it comes to monetary policy there is no such thing as waiting to fire until you see the whites of their eyes, huh? >> correct because by that time, they'll fire on you. >> mohamed, thank you. a lot to think about >> thank you, becky. >> great to see you. >> thank you >>e andrew >> thanks, becs. tesla keeps hitting corporate milestones and being very lucrative to elon musk. the guest host for "saturday ghli" is week. eye popping numbers stay tuned you're watching "squawk box" on cnbc we mend, fighting for every person in every neighborhood; we, the coming of the common good. so dare to care,

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welcome back to "squawk. the futures right now, not what they've been solid for most of the session, early morning session. 170 points on the dow. s&p indicates up 22. and the nasdaq is strong up about 56 points the dow transportation indep its 13en straight week in a row. let's get to jim, i know you were listening to everything that emanated out of the meeting with berkshire and becky

it's also may, i don't know if the calendars indicate anything but gives us something to give out. >> sure. may can be a positive month. a seasonal take right into memorial day maybe you got to wait a little selling the first three weeks of may? i don't know listening to warren a lot of common sense i know a lot of the arguments that andrew made were making very vociferously, i want to praise the millions of people starting out, trying obviously some are misdirected if they're buying apple calls, that's not what they should be but a lot of them have gotten invested in stocks that we know. happens to be their facebook, their apple, their amazon, and microsoft, things that they know and understand i'm a little more from the peter lynch school because i started investing with the magellan fund

in 1979. peter lynch was the godfather of the notion that people can see and do work and then buy so, i am not as critical, joe, of the younger people, new people who got in, particularly because what were they supposed to do? stay in cds? they also know capital gains were a better rate if they do want to go in and out. not that they should so i'm not as condemning i do wonder if both gentlemen don't understand change because things have changed. >> yeah. i guess it's only the capital gain is only changing for certain people but you think there's a rationale to reward long-term holds, jim >> well, i mean, i wish it were less stock market. and more creating, because i don't think there's a lot of creation to going and buying the stock of facebook. but i do think that there should be -- when you risk capital in order to create a business, i do think that there should be, ultimately, a much reduced

capital gains rate when you want to take an exit. but that's because you've hired people and created jobs and that's terrific. so, i believe that the stock market should be different from those who actually take the risk and buy. but to put money to work and borrow money, to do a restaurant to do a retail store to come up with a new technology to do something in the app store. i think those are businesses that create jobs and those should be rewarded with eye lower tax rate >> so, jim, the entire crypto universe, add it all up, add up the currencies, you know, 2 trillion in currencies coinbase, and then you got a lot of these other companies i don't snow, square, paypal, add it all up. and then listen to charlie munger i mean, both viewpoints can't be correct. >> no. >> i don't think >> it can't. again, i see younger people had made very big investments by buying slivers of bitcoin.

and they did incredibly well and you could say, well, wait a second, you don't know if they'll take it out and crash. but i've seen younger people going to this asset class which i think, by the way is an asset class, and make great amounts of money and you can affasterisk t money if you cash it out both gentlemen fought technology they bought the wrong stock in ibm. they got to apple by going to dairy queen and seeing kids buying apple they did not do the work where were they with these stocks? where were they with faang these were investments they had to make. they told $12 billion in stock during the pandemic period when a lot of these people got involved and made money. are i more in the robinhood camp i'm in the robinhood camp of

those who invested and i think they should be distinguished from those who gambled there are millions of people that got encouraged to buy stocks and isa lute them i cannot criticize them, they got in at a good time. >> you know, jim, you're a national treasure, too, for what it's worth thank you. >> thank you >> we'll see you in a couple minutes, andrew. let's talk about another guy who some people think is a national treasure or not there's always a debate about elon musk. he has an unique compensation package. the world's second richest man now eligible to collect $32 billion in tesla shares. that's because the company has met half of the targets in the musk pay agreement joining us jordan johnson, ceo and founder. i know, sir, you are outraged because of the plan. outraged what's the problem >> andrew, not outraged, but i think what's important here, if

you look at effectively tesla's earnings in the quarter. if you take away the onetime $1 million bitcoin trading, and you take away the credit and you take away the accounting stream of $445 million, they effectively lost $227 million. d rate, and the company is trading at a 2,400 multiple, so the earnings are very, they weren't what they appear >> so gordon, you know, i've had a similar view in some cases about this, which is to say it's not the cars that they're selling that's making them the money, it's thee credits and i know we argued about them being one-time credits but the question is, it's still money, it's real revenue, and he gets paid for making real revenue, and there is an argument to be made that as long as he can take

those credits now and use those to reinvest back in the business, lower his costs, so that he gets out in front of the other automakers long-term, that that's actually a very reasonable and even potentially brilliant strategy no >> that's a great point, andrew but the company itself said the credit revenues are going away this year. and keep in mind, what happened over the week, just on friday, tesla was telling people that they're going to produce cars out of germany and that plan has been delayed >> hey, gordon we're having a little bit of audio trouble with you we're going to take a quick break and come on back and contue ts bainhidete in just one moment don't go anywhere.

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gordon johnson from glj research is back with us talking about elon musk's multibillion dollar pay package. gordon, you were in the middle of critiquing the valuation more broadly, but the question, i just want to go back to the compensation plan unto itself, and we should also note that the compensation plan, elon musk has to continue holding these shares he can't go sell these shares so

depending what happens to the valuation, key get a lot richer or potentially poorer. >> right, so i think what's important here, andrew, is that again, the company lost a significant amount of money, including one-time items, an accounting change of $145 million, 518 million of credits that are going away by the end of this year and 101 million in one-time bitcoin trading revenue. you take those away, and they lost $227 million, selling cars. and compensated based on the bottom line number, it is being supported by something that is completely noncore, so i think that's number one. number two, you got to think about this, right, every time will is bad news on tesla, there are car options that expire literally within days and many times hours. that's not fundamental that is something that we think the s.e.c. should potentially look into. and the last thing, the german auto play, right, as recently as this past friday, tesla's arm

was telling people that the plant was on pace to start producing cars in the fourth quarter of this year over the weekend, they delayed that plant by six months so you're talking about 150,000 cars of capacity that they have for a model for next year, that you lilly have to cut in half. the company hasn't even put out an 8-k on. and if you think about that -- go ahead >> i was just going to ask you, given what you're saying, and look, i realize you've been bearish on this company for a very long time and you believe this company is vastly overvalued the question i'd ask you, given that we started with around the issue of elon musk's compensation, do you believe that elon musk is purposefully trying to effectively manipulate the price and valuation of the company to capture the compensation arrangement that's been organized here? >> i can't say i know the answer to that, andrew, but what i will say is, the german media has

reported over a week ago, they reported that tesla has violated environmental laws in germany, it was going to delay the construction of their german plant and they also reported that tesla has basically worked people too many hours and paid them below minimum wage, which is in violation of labor laws in germany, and yet, as recently, friday of last week, tesla was telling people that the german plant was on pace to produce cars at the end of this year that's a material push-out of their production in germany, which we believe, given the company is trading at 2,466 times earnings, where the industry trades at 12 times, if that news were to come out, it would be negative for the stock. he said that they will have the model, the top-selling car in 2022 we believe there is no way that's going to happen now that the german plant that put that, that german plant was the model initially. >> and final question for you,

the trading session this week in particular, elon musk will be the guest host of snl on saturday night there is a view that going into that or potentially coming out of it, that could be a big boon for tesla stock, might even be a big boon for dogecoin, we'll see, but in a week, or around this event, if you will, how do you think investors should trade this, even if you believe the valuation is overvalued, if you will >> right, so the way we were trading this week, andrew, is we think that the street is going to have to significantly cut their numbers next year. given this german plant has been delayed six months that's 150,000 cars of capacity that is down 75,000. but we would actually be selling the stock ahead of the street adjustment lower >> gordon, we appreciate you being here always interesting perspective thank you. >> thank you >> becky thanks, andrew

dom chu joins us with some top morning movers as we head toward the opening bell. >> we've got some analyst calls out there becky moving things pre-market and start with shares of clorox, lower by 2%, 15,000 shares of volume, the consumer products company behind the bleach and other cleaning products and also came out with a downgrade, to two notches, underweight, and the target price 170, from 240 and they call the stock dead money at best given increasing commodity costs and future potential sales catalysts. shares of carvana, 6,000 shares of volume, the online car dealership, e-commerce company, getting help from bank of america who upgraded that stock to buy from a neutral. and the target price goes to 350 bucks from 285 they cited among other things a pickup in demand and prices for used cars, given those tight inventories across america and then we're going to end on shares of draftkings which are higher by 1.5% 200,000 shares of volume the online sports betting

company gets upgraded to market perform, and a more attractive entry point for a trade given the recent pullback over the last few weeks joe, i know you're probably a contributory some of that robustness over there at draftkings >> that's right. thank you, dom we're almost out of time becky, great job thank you, andrew. thank you and you know what else is happening in may? may 5th. cinco de mayo. i think it's wednesday >> cinco de mayo >> which is nice >> join us, "squawk on the street" is next. see you tomorrow good monday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. welcome to may futures are green as we come off the best month for stocks since november another big week, with the quarter of the s&p reporting and plenty of headlines from the berkshire meeting and the road map begins with the buffett blast, the oracle calling spacs

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