good thursday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. stocks looking for stabilization after three days down. futures off the morning lows even as wholesale inflation runs hot. up 0.6 colonial pipeline restart. our road map begins with whether it's time to buy the dip in tech, and wall street on track for the worst week in more than six months plus, the real inflation risks, are investor worries on point? or overblown

and tesla's bitcoin about-face and rejecting the cryptocurrency as means of payment given environmental concerns carl >> guy, let's talk about where we are a few days after some selling here, jim. i did notice you on twitter this morning saying that you tend to agree that some of these valuations can't stand which one does you mean, though? >> i will make it pretty simple. anything that sells at price to sales, that is losing a lot of money, you're going to get a great chance to lighten up, hopefully at the opening so take a look at the portfolio, and by the way, if you don't know, whether it sells or the price to sales or not, that's also a good opportunity to sell. because i think there are a lot of people, and again, particularly younger people, who have not really studied snowflake beyond that they know that each one is different, david. every snowflake is different >> i've heard that, too. but at the same time, david, i'll give you something encouraging. >> please. >> a lot of the companies i

follow are really good, like apple, and alphabet, are selling alphabet ex-cash, market multiple, apple next year, market multiple, i mean that's good gone down a lot. and we've been very close to thinking to valuing socks on a 2022 basis so i see some of the classic growth stocks getting cheaper and these companies that just don't have earnings, david, that are selling on sales, and by the way, many of your spacs, i have a question. >> my spacs. >> well i always like to put things - >> i did start talking about spacs before it was common parlance. >> you started being critical. >> thank you i started to focus on them at least to some extend and of course what you're discussing in part is the projections that many of them are based on, which are based on multiples to revenues in out year, 24, 25, 26, as in 2026 and that has to top. >> as you take a look. the spacs have come down a lot, you can see that from the spac 50 there in terms of where

they're actually - >> how many spac sponsors would actually buy at below 10 >> bill foley last night was talking about it. >> i know you did. >> bill is not behind one of those multiples to sales, and the guy that have done deals with are much more focused at least, as i recall, on real multiples to ebitda, ebitda. >> business, you're a business person. >> yes and his investor base likes to say he's a money maker we will see over time. >> he has a record. >> he has a really good record. >> it is a very highly-valued, last night, interactive gaming, it is much higher value than some others in the same industry. >> right but back to the broader idea, jim, so today, if there's an opportunity, you say sell the big multiple to sales companies, the ones that were soaring last year, as we watched them all and started to make comparisons to the dot-com boom. >> i don't think that's a hard question. >> but move into some of these names that we're looking at right now or at least use an

opportunity because they're trading at market multiple, alphabet, facebook, top line growth for facebook, was 33% or a multiple below that >> i think there are a people who have a grudge against facebook, because every time you pick up the paper, but yes, facebook is inexpensive, and i didn't believe the story that came out earlier this week about how there's advertising peaking, i had j 2 global the other day, doing very well, and amazon, 75,000 thou workers for fulfillment and transportation. >> i'm looking at that right now. >> that's not a bad sign. >> 75,000, hiring 75,000 in fulfillment and transportation, as you say, jim, average starting pay, $17 an hour, sign-on bonuses of up to a thousand dollars, jim, on a day where mcdonald's comes out and says we're going to get all of our workers to 15 on average, by 2024, but we're already starting that process >> well, i think, look, we've said ad nauseam how much the

benefit, the extra benefits have hurt the labor market in the sense that there's lots of jobs wanted, because it pays to not work i will say that, and we're talking about this with david the other day, that people are starting to realize, these benefits are going to run out. maybe i should just, stop the mexican standoff and take a job. i also don't, i mean one of the things i agree with jay powell on is, you feel that i feel that people, we need to create more jobs. >> yes >> transitory. >> got to get that in there. within the five-minute market. inflation, transitory. >> back to jobs for a second which of course is the root of so many of the policies at least that are being pursued, the idea that it is going to increase employment and wages, those are great signs, i guess by the way, amazon, it's one of the stories of 2020, half a million workers, i don't know that there is any company that's ever added half a million workers in a year. >> not even, i think during

world war ii when they were making tanks it's almost -- >> now another 75,000, carl. >> incredible. >> yes. >> i think it was goldman earlier in the week, guys, that talked about, and jim, you can attest to this, the problems for hotels and restaurants, and hiring, are due, i mean to a number of factor, but part of it, they attribute to the migration of workers to warehousing, and transportation. which amazon is obviously a key part of. as for the tech volatility, guys, masa son did talk to andrew about where tech stocks are right now, where we are in the narrative of overall volatility, within tech. and here's what he said. >> i think it's just, well i think it's based on the people's view on long-term interest, and as some interest in it may go up, it's not the change in the company's performance, the

fundamentals very strong of companies that are growing, tech companies that are growing, they have a record high profitability, and so on it's just that the people's view on the long term interest rate and just a cyclical thing. it's no fundamental change >> interesting, jim, it kind of reminds me of some calls that we're getting out, a good example is mkm, initiating cisco at a buy, 61 target. talking about the ultimate flight to quality within networking as they put it for example. >> selling at 15 times earnings. a fantastic balance sheet. and great management where 5g is going into the enterprise. chuck robbins told us last year, look, 5g will still be personal. consumer but next year, the enterprise. so it's a good bet i mean it does have some d ram exposure but i think d rams have

peaked so i think cisco is the kind of stock that i like. cisco is, what, it goes to 48, david, if it misses? >> so you don't see a lot of down side? >> 16 times earnings. >> you know, you could say well, wait a second, it doesn't have the growth of poshmark but i would tell you, poshmark, pock mark? my daughter says she is working with poshmark. >> it's a verb. >> you can make lemonade out of posh mark. that's another one that is not doing well >> stocks to watch. >> i have a lot of companies that come on, carl, and they are dedicated to losing money. now, i once started a company, the street.com, and i didn't have the guts to say stuff like that i just couldn't. i couldn't bear it. >> if you had invested more, there would have been more ultimate return. i mean that's the view >> well, i'm just saying that at least i tried -- >> at least --

>> i tried to be profitable. >> pour inasmuch capital in the early days and if the market is willing to give you that opportunity. >> the go to market strategy is so right and i know you want to land and expand because it is so big, but at a certain time, you got to at least say you are going to make money. >> walk like frazier land and expand and use the tam, it's so big. >> carl, they come on the show, and they say the opportunity is too big to even think about making money and i've come back and i say that, okay, amazon, that was true, all right? netflix, that was true but those are rare examples, carl there were three other companies that came public in 1999 that had that same strategy, i'm not going to even think about profitability. and they never have to worry because then they didn't exist a year later carl, this is happening and it's okay to talk about it. it's okay to say, well, one more spac, i have a friend who had a spac, the other day, and he said, you know what, i'm aiming toward profitability

yeah, i mean i'm aiming to lose money forever. the idea you're each aiming for profitability, what does that say? >> yes. >> anybody who has been, anybody who has been in these unprofitable tech baskets can attest to that mind set and they've got a lot of pain to share. speaking of pain, watch bitcoin today, guy, elon musk as we all know by now saying tesla will suspend car purchases using bitcoin and says we're concerned about rapidly-increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel. david, we've talked about this for a long time. we got a lot of graphics to share. >> yes >> with how bitcoin emissions stack up against all kinds of various asset classes, and companies. >> yeah. >> i think we got the wall, we can show you the wall, because i do always like this graphic that we used previously but bitcoin is right in there, right more than chile.

a little less than finland belgium. in terms of energy usage and that's just bitcoin. that's not the others. so the blockchain news is a lot of server power, it use, i mean servers, it uses a lost power, and not all of it is being generated in friendly bays, friendly way, jim. >> friendly ways >> to the environment, yes. >> coal is declining as a base fuel in our country for a very long time. >> it has. >> and not declining in china. >> no, even natural gas, even, you know, i mean i think that's included in here, if you want to be really clean, it's got to be solar or wind i guess is what they're properly considering but the point is what you're looking at, there is a lot of power consumed >> it's always been a lot of power. i'm not so sure that that's, i'm not saying it's disingenuous

because it's elon musk and he's a visionary and there is always a lot of energy use, for mining, and that is nothing new, and the only thing is coal is less a configuration of energy, and i would like to know more about his decision, and frankly, it's a tweet and we're not going to get more than that, 53 million followers are not going to abandon bitcoin, because it uses a lot of energy. >> no. >> and they're not going to abandon tesla either back to the previous conversation, jim, i mean you can point to companies like tesla that were not profitable for some period of time. managed to maintain dush. >> that's true i should have mentioned tesla. >> and looking at profitability. amazon as well we're all looking -- >> i mean amazon less so, they were not, as he said from his first letter in '97. >> future free cash flow. >> i think it's absolutely right to search for the next tesla i think you're nor likely to find it among conditions that talk about profitability some day, or they're run by geniuses.

and they're not that many. not many geniuses come around all the time >> no. >> carl, if you remember, there were a couple of companies that survived the dot-com collapse and they tend to be run by genius, and they are a little harder to find, just like in the nba, how many great flars are th, great players in the nba how many dimaggios in baseball >> not that many. >> or the hedge fund industry. >> the hedge fund industry, they all get paid like they're all superstars >> the mets are in first, thank you. and we haven't even started showing our stuff yet. just wait for syndergaard. >> the next opportunity. >> we're gating an opportunity today to lighten up on companies that could be the next tesla but probably won't be. ev charging. >> that's pithy, jim a good way to put.

it we will watch it obviously, and see if these relative gains given the last few days hold here as futures are green. we will get you caught up on the latest on the pipeline as well as the energy secretary says expect normal operations within a couple of days n'goway.

the pipeline restarting

operations following the hack with the company warning it would not be fully functional immediately. the president has set to speak about this later this morning just before noon east coast time, jim. we now have a statement from colonial saying by midday we project every market we service will be receiving product from our system that's encouraging >> it was never really that much gasoline that was cut off, but there was hoarding and any time there's hoarding, then you know that we're going to have a very tough situation for the rest of the country. there will be no hoarding now. and you'll see these companies all, which are very good by the way, see their stocks marked down, because i think people felt once again that colonial would last longer, and like they thought by the way that the pandemic would last longer people just are talking about commodity prices lasting longer and not realizing that lumber peaked already. >> you think it's at its high? it's done? >> i don't want to say done, but yes, absolutely. >> that's good. >> it was a cornered market, i

think. >> people want to build things. >> well, it just got ridiculous. and at the same time, if you're a home builder, you can still -- >> the homeowner stocks. >> lumber. >> remember, i went to a lowe's last week, and there was the lumber, and it looked exactly like the lumber when it was at $300 >> look at that move for you. >> look at that chart. >> look at that move. >> is that cathie wood >> no, not lumber. >> she didn't go into the lumber business. >> not yet because it's hot there's a spac that took over. >> not true. >> sorry >> we had dinner last night, and i know we were scounded by people who had done spacs. >> without a doubt. >> they hated us >> they hated david, because they were like thinking this man is keeping me making my $500 million and he's just, she go to wherever >> yeah. the spacs are still interesting. >> why >> because you can get as low as three buck, two bucks on the

actual price and the spac sponsor can still make money it is basically -- >> why is it not disclosed at the bottom >> there is a lot not disclosed. >> carl, on colonial, tomorrow we will get insight on energy overall, do you know why take a look at that. >> on our show >> with you, me and carl. >> not another show? >> on our show. >> darren woods. looking forward to that, carl. >> that is good. corporate darwinism keeps us sharp here at cnbc it will be great to talk to him. in the meantime, gas buddy is the number one app on apple. that was interesting and there's a larger question about the vulnerabilities that this whole episode exposed, the president signing this eo, to strengthen the nation's defense, but what kind of lesson some of these hackers may have learned from this attack >> there was lascitude

everywhere >> the robinhood app was dislodged by gas prices. >> briefly. >> briefly. >> you got 70% of gas stations in north carolina without gas and nearly half of georgia, so people are definitely looking for information. >> david, people are driving. >> we'll take a break here a lot more to get to including a bunch of calls on, as we said, cisco, there's some on deere, we got boeing, microsoft, lowe's and a bunch of others, and we'll take a look at futures here with the opening bell in 10 minutes we are thrilled we finally found our dream home in the mountains. the views are great, the air is fresh. (sfx: branches rustle) it is bear country though. hey boo-boo! we hit the jackpot! bear! bear! bear! look, corn on the cob! oohh chicken! don't mind if i do! they're hungry. t-bone! that's what i call a smorgasbord! at least geico makes bundling our home and car insurance easy. they do save us a ton of money. we'll take the cobbler to go! good idea, yogi. i'm smarter than the average bear!

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seven and a half minutes until the opening bell on this

thursday a number of earnings to digest bumble, a very hot ipo. >> i've been loving tech check a great show people are watching it, they've been getting great guests and they have whitney wolf herd, very young, a terrific ceo with a terrific company and this is a good example, this company is growing 43%. it has ebitda, but they were, they're also cautious. they said the growth rate will be 25% going forward most of it is organic. questions in the quarter about how much are they spending money advertising and they assure you not to worry but david, this is the kind of stuff the market doesn't like >> right. >> and i can't wait to hear what she says because she's done everything right see, this is what is so discouraging in this market. someone does everything right, they say they're growing at 43% rev, but they do say growth rate going forward is 25% a year. >> it came public during the height of -- >> yes. >> i don't want to call it a mania but the height of let's call it exuberance, for companies that had great growth

prospects over time so it suffered as result but if you were to say today, the stock is trading 47 based on all this we know, would you buy it >> well i still think you can get it lower just because there are a lot of good companies that the match is less expensive. and it is a good comparison, this grows faster, match is a terrific company, but again, david, what is happening is that people look at this and say you know what, this is the kind of stock that has bad holders, it has holders that have one foot out the door or holders that don't understand it meaning it has a lot of young -- >> blackstone still owns a lot of this thing, right i think they've got some significant holders. >> but i will say it is a very good well-run company with a conservative management that said that look, maybe the rates can stay >> and they like the model, jim. they like the women first model. >> that's great. >> i think it's a terrific company. >> i don't know about the stock. >> you say that for a lot of things today. >> yes, i do

>> get you ready for an opening bell and a look at all of the stocks in ju aewines ayitusst f mut

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these stocks aren't that expensive. and you have to look at the s&p 500, and ten stocks are 25% of it, and then faang stocks aren't very expensive, it's not the googles, and the apples, and the facebooks that are expensive, it's all this newly-born tech wrecks that trade at, i was looking at, because everyone wants to buy peloton, you know, it's i think 150 times ebitda, or shopify, which is 350 times ebitda, i mean these are great companies, they're just not worth it tesla, tesla cannot be worth more than all of the car manufacturers in the whole world. at the end of the day, it's a car company. >> newly-born tech wrecks, according to him, we were listening together, talking about the number of names in the s&p, dozens and dozens of components that are down 20, 30, 40, 50% from the highs >> look, barry is a brilliant

business person. by the way, he's modest, he's too modest, he came on "mad money," when the starwood, his reit had gone down 16, distribution was high, and he said, look, i would buy it, business is great, he's a great business person, he's looking through the prism of being a great business person and he's right. he sees stocks that are cheap, the faang stocks, that was great, saying i know, faang stocks have fallen apart i like the faang stocks. but there are, i mean the valuation of peloton is a little high i've been saying that. the management doesn't care for my view on it. and shopify, love the company, but yeah, i mean i can't recommend the stock. it's also a wood stock and i can't recommend any wood stocks. >> any >> there's a handful. >> i like tesla. >> but what about the woodstocks, very hard. >> and barry has an incredible ability to analyze capital structure, balance sheet of companies. >> yes. >> and that he's obviously, he's got the other part -

>> he's a great humble guy, and does not come on - >> he's just very, very good and very smart and don't get him started on spacs he's been just, spit fire has done a bunch of them but he has some interesting things to say on that subject too, when it comes to other promoters out there. >> if i would own one, i would own his. >> there is the opening bell, guys s&p, heat map at the bottom of the screen, as we're starting the trading day. united says it is starting to repair those electrical groundings, jim, on the 737 max. and we do have a call on boeing today, out of wells. they initiate equal weight, 244, they talk about the max losing some share, within their own body but that the summer will look good for leisure, long term, international, a little less certain. >> i'm not sure about this quarter. this problem that they got fixed. the execution at boeing is questionable they were pretty much assuring me that this problem is done

immediately and maybe it was fix and the faa just has had it with them, but i like boeing, my travel trust own it, but i'm confident, that i don't think this quarter is that good, we don't have chinese certification for them david, when you look at a company like boeing, what you really have to say is they got saved and then when travel really comes back, they will do well and you want to anticipate that and that's what's happening at the 150 level but do you anticipate again? i mean it's already been anticipated. it's good. >> so right. that is already, you believe, incorporated in the current -- >> i like it i genuinely like it. i think boeing is good to own but you have to understand, this quarter, you have to, you have to suffer through this quarter and it is the quarter because of what happened with the execution. they did not execute well. they are not executing well. they're not. they're not. david, there's a podcast, people think i'm just talking to the air. could you say something because of the podcast >> it's interests to hear you say that, jim.

you don't believe they're executing well now. >> they're not very sloppy. >> really? >> is that an indictment of the current management team? >> no, it just says that something is awry there that you have an electrical problem, after assuring people everything's fine. >> it was not as though they were having a great run of execution prior. >> there, thank you. good for the podcast, too. >> you like that >> some companies execute better than others. i can tell you, people should read bezos's letter about amazon's quarter it's very long, but if you go through, it the one thing that you will see is, i said the other day, i am glad i do not have to compete against this company. and by the way, he is offering benefits that sound almost costco-like. costco pays much more. >> and better benefits. >> and costco's stock, how is it doing? >> very well and amazon has done incredibly well over time >> i like amazon >> half a billion on a yacht >> that's a lot.

>> well, i don't know. >> 500 million bucks on a boat. >> how much is a submarine. >> key get a submarine. >> nuclear power >> let me talk about a submarine. let's go down to saint bart's on my submarine diego garcia on the submarine. >> it doesn't seem that attractive to me. >> you haven't seen the way mine has tricked out. >> trick me out a submarine if you're a billionaire go under go up. go down. >> you got to do something unique. >> maybe jack hamas -- jack ma maybe has one. >> and let's look at that. >> 3%. >> is wasn't a perfect quarter. >> revenue number was still strong, they're investing a lot in the business. and so the earnings number may not have been exactly what everybody was hoping for and remember you had this big fine

with the anti-trust fine, and that did have an overall depressing of the earnings number if you take that out. >> did you hear masa son >> they have sold softbank, some of the alibaba. >> alibaba makes a lot of money. >> that's the kind of company i like it makes a lot of money. >> right. >> is that too much to ask, david? >> no. >> of the spac promoters >> no. >> trying to make a lot of money. >> always a good thing and they anticipate that they will eventually make a lot of money. you just have to try to secure future cash flows. investing for today. and get new capital. >> and they all, that's the land and expand model i just find that we have to, we constantly have to compare to 2000 now >> okay, but we were doing that last year. we were comparing the run-up >> yes that's right look at what's happened.

>> we were talking a lot about the multiples. >> they are talking a lot about snowflake, and how rich that guy was getting. >> but on alibaba, guy, just real quickly to go through the number, revenue as jim points out was up 64% some of the other numbers are staggering when you think about the chinese market >> aren't they >> mobile maus, monthly average users, 925 million people use the mobile app at least once in march. 925 million people they also have something called, i guess similar to a qvc they stream and try to get you to buy and the people come on and tell you what, and they did 76.3 billion in gmv in fiscal '21 with that service. the size of this company is enormous >> have you bought into alibaba? >> have you bought anything from alibaba? >> no. >> i have.

comes perfect. >> and i have. >> originally, you could contact with somebody who would then import here for you. >> yes. >> get shares. >> for a restaurant. >> alibaba >> cheaper than going to the restaurant we don't do that now we buy american. >> you do? >> yes, we do. >> glad to hear that. >> and we build american, carl >> we buy and build american we just do >> that's definitely been a theme in commerce for a couple of years now, at least it's a real priority and i'm just looking at some of the gainers here, jim. it's definitely a day for faang and for chips. but also, some reopening names caesar's gap. southwest airlines winn i did notice, jim, norwegian is up, there too, six states that have now vaccinated 70% of their population including connecticut and new hampshire and maine. and six more at 65 >> that's fabulous >> it's happening. >> it's nice to see. >> yeah. >> we had this curve bending on vaccination trends that is beginning to reverse a little

bit. it's heartening. >> i know, i had winn on last night, and they are, they will, i think handily beat 2019 numbers. handily. and that's really good great management don't forget the nfl is in vegas. >> yes, it is. >> and those games, you know, that's going to be the ticket to get. >> at the game in vegas. >> and the betting will be big. >> right >> carl, i think that vegas is, these stocks have moved, well, winn has not moved all that much, secondary, the cruise ship, it's interesting, they've been under a lot of pressure and suddenly they're bouncing a little bit those are very expensive stocks. because the cdc has decided that they should be expensive the cdc is the most erratic organization, and they ra, they come in every day, and i think they say, put out a press release about something, how about singapore workers. >> how about those singapore construction workers which contributed to this idea that

somehow you could actually contract the virus outside in a significant way, when that was completely not true. great story in "the new york times. this is actually 0.01. and meanwhile most of new york still walking around with a mask outside. >> going to vai garks and repr dush going to vegas, and you might want to rent a car and if you did, it might a be a hertz and take a look at the details yesterday of the performance of hertz. >> during scott wapner's show. >> the hertz shares were up sharply on that reorganization plan 6 billion. but jim, i'll take you back, less than a year, and these today's move, on top of what happened yesterday, remember when they were going to try to sell shares, and they managed to sell $29 million worth of stock, and do you remember -- >> when they were bankrupt >> and we were both saying, man, that's kind of crazy maybe not so crazy, you know, they could have raised as much as, i'm told a billion, that actually would have had the

effect of enhancing the recovery value for the equity even beyond what you're looking at. >> there's too much money sloshing around, that's the case. >> you remember the s.e.c., remember who came out and stopped that >> jay clayton right? >> jay clayton, the s.e.c., ran the s.e.c., said we're not going to allow you - >> they were doing something >> to sell the stock, to take advantage of, was the idea, of some of these people who were just entering the market at that point, and of course in fact they might have been right if they could have bought the stock at two back then recovery value due see it often american airlines is another one. hertz is a significant recovery value. but it is interesting. by the way, the same jay clayton is the chairman of apollo which is the big buyer of the preferred, one of the big participants in the re-emergence from bankruptcy. funny how that works won't let him sell the stock at the s.e.c. and you will take advantage of people, it will be a zero and of course it ended up not and participating in jay

clayton. >> that is too funny. >> that's called irony, david. >> is that irony >> it's irony. >> thank you >> carl? >> that's it >> was that like a faber report. >> kind of. >> we'll bring more up for you. >> there it is there is some of the direct common tock. apollo sup. buying a preferred a billion and a half some of the details and hertz's move yesterday was astounding and it is again to your pound, a beneficiary of this idea of a big recovery in travel and in normalcy >> do you think that the cdc actually wants this to end >> it was a levered play. >> they seem to love the limelight, the cdc >> well -- >> the rockefellers. >> it's been disappointing. >> very disappointing. >> yes. >> >> but carl, i'll tell you, thisrally, it's giving some people a chance to kind of reconfigure, and i think this is a great opportunity, to assess your portfolio, and ahead of the retail sales, about how many companies you own that actually makes money, and once again, i

want to say to people, if you don't know whether your company makes money, perhaps you shouldn't be owning the stock. >> right >> jim, i did notice you said, you thought the estimates for retail sales tomorrow might be a little bit low >> yeah. i mean look. there's a recommendation of lowe's today, and i think the lowe's and the home depots are just crushing it crushing it. plus, the cost of all of their stuff is up big. when you go to buy an appliance, if they have them. so i figured the sales will be pretty strong. it was the unemployment number that i think that's the outlier on the lowe's side i like lowe's very much. i love shopping at lowe's. it's much better than it used to be >> so at the moment, it's the best gain for the nasdaq since april 23rd obviously early. all sec tors green except for energy let's get to bob pisani. hey, bob. >> good morning, carl. ppi was hot but not much of a

reaction it's growth that is leading. and most of the concern obviously was yesterday, and a lot of that move up today a little hotter and obviously im bedded in stock prices take a look at the sectors the tech is leading. and tech and consumer discretionary up, and you can see, banks doing okay, too, industrials not far behind and energy a good day yesterday, with oil right near a new high, lagging a little bit today so that's not a big surprise and mega cap tech doing well, but remember, mega cap tech was never really the big problem most of it down around 10 purse from the 52-week highs the fundamental guys really stuck with mega cap tech because the valuations were quite reasonable it was schematic tech, speculative tech that had a hard time that's bouncing back as well today. we like to look at ark innovation, up 1%. clean energy, 3d printing, cloud computing. this is schematic technology, that had such a tremendous run, last year, that's run into tremendous trouble in the last couple of month, ever since

february when rates moved up here if you take a look at some of the big say cloud computing stocks today that have been down so much recently, they found spacs, so snowflake, jfrog, the usual complex there, fastly, so much damage done, we've been doing this the last few days, showing you most schematic tech is 25, 30, even more% off of their high, and cloud computing here is what i'm shoaling you. a 2% bounce is nice but 50 or 60% off the high, that's an awfully long way and even though the momentum guys couldn't sell to other momentum guys. the fundamental guys didn't want anything to do with most of this stuff because in many cases it doesn't make a lot of money. so it's been ugly here, and it's going to be a long road back for them as to where we are in the markets right now, most tech, outside of mega cap is down 25 to 50% and the debate is how much is enough there is a lot of excess that

has been taken out of these speculative plays here momentum has abandoned a lot of them and fundamental hasn't had a lot to do with it. we will see if this is enough here remember yesterday, a major tax bill now, looks very unlikely. mcconnell was really emphatic about it that is a major plus for the markets right now. the big debate right now is how sticky is inflation? should we give to the market, give the fed the benefit of the doubt that this is transitory. that's where the debate lies, and that's where the market risk is right now and as for stocks, and inflation, it is good to remind everyone that it is a very complicated relationship overall. some inflation is im bedded in stock prices and the market expects some kind of inflation, maybe 2% when you get a sudden move, that's when things get bad all of a sudden you're at 2% and you expect 4%, and the market is going to expect, it is going to have a higher risk premium, concerns about earnings are going to go down and prices are going to go down to adjust here. remember something important, inflation in a rising economy, which is what we have has less

impact than inflation in a declining economy when earnings are going down we may be able to absorb this okay and the margin pressure we're seeing has been very minimal we're still around 10.5, 11% on the s&p 500, and no big pressure yet, we'll keep an eye on it and finally, david was mentioning alibaba, i just want to point out something that happened overnight, and nsci announced they will no longer use the u.s. listing of alibaba, right here behind me and the indexes and they're the guys who do the big indexes around the world, and they're using the hon hong, hong kong listing now, and ali alibaba had the dual listing and using the home country now for the listings and a lot of this is still the fallout of the u.s.-china relationship even though they're using the home country and having the dual listing is changing. they have the eem out there. that is no longer going to use the u.s. listing. >> it will use the hong kong listing a little bit of fallout here there's the em and that is the msci index that

they use there for i-share carl, back to you. >> all right, interesting, bob, thank you, bob pisani. 10-year yield did get above 1.7 this morning let's get to rick santelli hey, rick. >> absolutely. inflation numbers are really kind of the secret sauce, if you're looking for rates to go higher, along with of course, we actually had some pretty good jobless claims, especially initiatives dropping let's go to the board for a minute bob asked the question and i will try to help explain or answer it. how sticky is inflation? why does the word use the word transient? i will show you. it's pretty easy, actually april ppi, year over year demand, never been this high, but do keep in behind this series of data points goes only back to thanksgiving of 2010 because they keep tweaking how they calculate so this enrision back to 2010 it's never been higher but we have what we call a negative lookback or the base

case because april of last year, which we're doing a year over year add-on to inflation, was at a record low minus 1.5 but for may, coming up, june, july, all the way through august, those year over year lookbacks are going to be adding on, so zbreexaggerating inflatin because they're jumping and comparing to negative numbers and that is something you need to pay attention to. so if the fed thinks maybe transient, because when that effect is over, they think maybe inflation will look a lot more tame but that's still a gamble. because it could still get its sea legs and me as itass size a and beyond that effect if you look at the 8:30 release of the data today, you can see we only had a small spike before the 8:30 release on the 10-year note yields and that's kind of interesting, because ppi was hot, but cpi was hotter, and it really hit home to investors look at a two-day chart yesterday. you can see that big run-up. that was the 8:30 consumer price index. now, if we consider that 10zs

have a 1.74 post-covid high yield close, these are all very important sessions, as we get closer and closer to that 1.70 mark finally, if we look at the intra-day of bunds, this is also having an effect with pulling up global rates they traded negative 9 basis points today, and they have net close to positive, as you can see, since may of 2019, two years, and carl, jim, david, back to you. >> already, good stuff, rick you carried a lot of water this week for us, we appreciate it. rick santelli. at the moment, nasdaq up almost 1%. a little bit of a respite after three days of selling and so far this morning, it's just the s&p that is having the worst week since october. i'm only 21

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the new york yankees have confirmed seven cases of covid among coaches and support staff. jim, as we were saying a moment

ago, six were without symptoms, but all seven are breakthrough cases, meaning they were fully vaccinated which we know is possible but rare, and a spokesperson says they all were believed to have received the j&j vaccine. >> we know the j&j vaccine quoting the new england journal of medicine has -- does not have the immunity that the moderna and pfizer have. but i want to be very careful here because i had a robert ford from abbott labs on. they've got this over-the-counter one look, you should be using it if you have j&j, he feels, no, he's agnostic, look, if you are concerned, you can use it for any one of them. i don't want to single out j&j, but j&j obviously less effective. i just got to say that. >> by the way, less effective monoclonal anti body, and that's not talk about eli lilly, they're telling you not to use it in illinois where they've got the brazilian.

you should just use the regeneron. this is kind of amazing, they do these things they don't tell us lily may not be as good against brazil doesn't work >> yes, that's part of the hesitancy is at least if you believe the polls that the information is so disparate that it's not confirming confidence in vaccination in general. got a 1% gain here now on the dow. up 322 and the nasdaq's up 122. don't go away. hey lily, i need a new wireless plan for my business, but all my employees need something different. 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.

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let's get to jim and stop trading. >> what i mean about stocks coming down. lam rcesearch, the company that makes the key piece of cap equipment. watch this stock it is an example of stocks get cheaper when they go lower i like management very much. lam research, key to this market as i used to say to david. >> all right, jim, how about tonight? >> okay. here we go i've got sonos, which i love at

home don't know if you guys use it. tony xu, door dash, and then alicia haas, coin base coinbase crypto. >> look at many of those companies coming public recently. >> i booked my own show, and i have great bookers and my goal is to steal anyone that you've ever met. >> yes, i'm aware of that. as is carl >> that's the show tonight, jim. we'll definitely with tuning in for that "mad money" 6:00 p.m. eastern time gains back above 400, don't go away that building you're trying to sell, - you should ten-x it. - ten-x it? ten-x is the world's largest online commercial real estate exchange. if i could, i'd ten-x everything. like a coffee run...

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. good thursday morning, welcome to another hour of "squawk on the street," i'm carl quintanilla with david faber and morgan brennan call it turn around thursday, after three tough days, we've got 1% gains on all the major averages early days in the session here at this point, it is the dow's best gain since about april 5. >> we're 30 minutes into the trading session. here are three of the big movers that we are watching specifically this morning. sonos, shares popping after the company beat estimates for the

quarter, raising forecasts on strong consumer demand you can see the shares are up 11%. posh mark, heading in the opposite direction those shares are plummeting. the secondhand retailer reporting widening losses and disappointing losses a similar story for thread up, also under pressure. the ceo of posh mark will join the closing bell, catch that at 3:00 p.m. eastern. finally, bumble, surprising analysts with an adjusted first quarter profit recovery and romance, if you will but it's still under pressure. right now it's down 8.don't miss the ceo of bumble, by the way, on tech check. >> thank you, morgan inflation fears have been hitting the market until today as yousee. one of the overriding questions, is the inflation square over blown. our senior economics reporter steve liesman joins us with more on this continuing story steve.

>> big debate, david this morning's price index, joining a string of stronger than expected inflation reports, stoking market fears there's another side to the story, that backs up the idea the surge could be temporary overthe next several months. exhibit number one, airline fares. they pushed up substantially, the price index, and today's ppi. while they rose 10% of the cpi, 18% below the level of 2020. hotel prices remain below the february 2020 level while they're rising right now the price increases, they should moderate as supply comes back online in just one example, my colleague, phil lebeau tells me available airline seat miles are 30% below the 2019 levels. when they come back online, that should ease some of the price pressure, and then there's also commodity future prices. a host of commodities, like lumber, are in what's called backward dation.

prices fall substantially below where they are right now, a bet on the markets in lower prices base effects are pushing up the year over year rate. inflation fell at the beginning o. pa of the pandemic. they should lessen in the months ahead. that doesn't explain away the strong monthly increases we have had, the fears of higher wages, the strong fiscal support that's out there. it's reasonable to believe the outside gains will ease off in the months ahead in the meantime, it's a race will prices begin to drop before a longer term inflationary mind set sets in among consumers. that is the bet the fed is making right now morgan. >> steve liesman, thank you. that tees us up for the first guest of the hour, goldman sachs chief investment officer david costin good to see you again. >> nice to see you we have been talking about inflation for months now, i have a strong sense of where you fall in this debate that being said, given what we have seen in terms of market

action, is it time for investors to be inflation proofing their portfolio in some sense? >> well, morgan, the question about inflation is really a topic of valuation and you can look at the equity market in terms of valuation, and also on earnings valuations are definitely expensive. relative to history on an absolute basis relatively more in line on an interest rate adjusted basis from a valuation perspective so really the debate with the portfolio manager community has been how long is transitory, and i speak almost every day with major ceo or cfo of a corporation. everyone in the corporate world is expecting inflation in their products over the next six months that's sort of a horizon to think about where there's going to be a lot of noise and information about inflationary expectations and pricing but the earnings power is really really substantial, and so all of this focus on earnings is obviously sort of not getting the

appropriate focus that i believe it deserves. yet, the record level, positive surprises in 20 years on earnings in the first quarter, which is just about completes, you had earnings, margins at record high levels, part of that's benefitting from higher inflation. costs are getting pushed through. ultimately, it's companies that are investing for growth have been outperforming those are where we should be focusing attention portfolio managers should tilt their portfolios towards those companies. that's the strategy as you look for the rest of the year our target for the middle of the year has been 4,100 for the s&p 500 and 4,300 remains for the end of this year >> now, david, i mean, let's talk tech for a minute, and i realize we're seeing a balance in the markets right now nasdaq is up 1 1/2%. given the selloff, the downdraft we have seen that's been led by some of the biggest names in tech in recent days, in recent weeks, is it over done how are you thinking about some

of those mega cap tech names and the fact that as they move, so too do the major averages. >> you're right. the idea of the five largest companies in the market, amazon, apple, microsoft, google, facebook, those five companies comprising around 20, 22% of the equity cap, record amount of concentration, relative to history, other than last fall when it hit around 25% so those companies almost by arrhyth arithmetic are going to drive the average the rest of the market, sales around 8%, 9%, so the data would suggest the business activity is really really strong. i think the durability of the business was reflected last year when they really market had sales down in the second quarter last year, down 7% 18% positive revenue growth. i think the stories of these companies is the durability of their business models and more

important is looking forward i mean, that is the question we're focusing on in terms of managing portfolios, working with clients and these companies reinvesting in their business. the typical company in the united states reinvests maybe 11% of cash flow operations to grow their business, growing in the form of capx and investment r and d. those are the 11%. these companies are like 65% most of their cash flow going back into the business that is a real differentiator when you think about the business outlook for 2022. markets already focusing on earnings growth for next year, and companies are investing this year, best position for growing into next year i think that's how i think about it in terms of those big stocks, morgan, that you were asking about. >> david, it's david what about the stocks that trade more on multiples to revenues, on their incredible growth

prospects but the fact that they do not have a great deal of ebita, if any, anytime soon. >> so we have a group of stocks. we call them the nonprofitable tech stocks. you think about those companies where there's neg tiff ative eas as you point out sales are growing dramatically it depends where you want to anchor the starting point. those stocks up almost 400% in calendar 2020 and this year they're down 40%, a basket of companies. they're down a lot they're trading at extraordinarily high sales the history suggests buying companies at that valuation, that extreme level of valuation, generally leads to under performance, and so really it's a question of, you know, where are we anchoring from. those companies last year were big beneficiaries the fact of revenue growth and moving into software, and the digitization that you talk about so much in terms of business activity around the world, and in so many different companies. they were the big beneficiary,

and i think it's a valuation reset for a lot of those companies. and that's probably, you know, it continues to be still trading, even though they're down, you know, 40% or so, they're still trading at very elevated levels, and i call them the glamour stocks, and they'll grow into their valuations ultimately, because their expectations for revenues are so significant. valuations, you know, make it less attractive than some of the companies more cyclical beneficiaries, near term, shorter duration stocks. i was on last month, we talked about the idea of rising rates and what that means. it suggests that the u.s. economy in economics decelerating as we go through the rest of the year peek level of growth next year, and that decelerating environment, growth stocks will benefit. think about a transition on a barbell, cyclicals now, and transition through the rest of the quarter, the tech stocks and

particular longer duration will do better in that environment. >> speaking of rising rates, david, fed fund futures are pricing in 80% chance of a hike in late '22. it was 66 just last week i guess i'm wondering, how should we think about those odds if, in fact, these bottlenecks are going to tighten or make things a little bit tougher on the supply side for the next couple of months >> you go through, as we did, the conference calls, and all the transcripts that just took place for the first quarter results for all the companies, and they were talking about the idea of bottlenecks and price inflation, and they also talked about the recovery in the economic activity. so there's sort of two halves to that, carl we can look at it as there's pricing pressures and disruption opt on the supply chain, the port of los angeles, and the cargo

transportation and all of these issues are real, and present and they're current issues they'll persist for several months our argument, probably for six months, based on the conversations i have with executives they're just expected to be there. the question then is, that's also reflective of better economic activity, and higher earnings and so it's a tradeoff between the valuation and the earnings growth and my argument is it's really an earnings story as you look forward. and then thinking about that in terms of cash flow, where are companies directing their money? we're looking up 45% in cash directed towards cash m and a, happy about that. record amount of activity in the fourth quarter and first quarter, likely to continue in terms of companies, and the same thing for companies investing for growth. >> david, thanks for joining us to kick off the hour here. the s&p is up 1.2% as we head to a quick break. here's a look at our road map for the rest of the hour after a six-day shut down, colonial pipeline says all of its markets should receive

product by midday. but just what are the broader energy sector implications we're going to talk with the ceo of pioneer resources plus, is it time to buy the tech dip apple, amazon, microsoft, al rallying of course we talked to david about that rally, in fact, carl. >> and crypto crashing following elon musk's bitcoin reversal we're going to decode that move later on this hour as we've got the best day for stocks at least in a month "squawk on the street"ilbe ghback wl

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welcome back to "squawk on the street," an update now on the cyber attack that shut down the colonial pipeline. the company restarted operations at 5:00 p.m. eastern yesterday but warns it will take several days for the supply chain to return to normal government officials say gas supplies remain at reasonable levels but the outage sparked panic at the pump as buyers rushed to gas stations to top off tanks. gas finding app that vaulted to the top of apple's app store yesterday, 71% of gas stations in north carolina are out of fuel 52% in virginia. 51% in south carolina. and 50% in georgia david. >> we can certainly get into that with our next guest scot sheffield is the ceo of pioneer natural resources. i want to get your take on the colonial pipeline.

i would rather start off, if you don't mind on overall demand during the conference call, i believe you said we're going to pick up another 5 million barrels a day of demand. toward the end of the year, we'll pick up another 2 million barrels in 22. so you're talking 8 to 9 billion barrels a day. within a year you still feel comfortable with that. >> yes, david, it's great to be on your show i'm always used to talking to jim or brian, so it's good to be on your show for the first time. pioneer had a great quarter. our recent acquisition double point added over 5 billion of free cash flow over the next several years. we're going to have about 23 billion of free cash flow, and committed to giving about 80% of that back to the shareholders. and so we're creating a variable dividend it will be approved by the board next february for our first variable dividend, and so we're moving away from this generation of grow, grow, grow. to distributing over half of our

free cash flow over half of our cash flow back to the investor base. >> and is that going to change your investor base in some way, do you feel? >> yes, it has the industry has gone through, we are mostly a growth sector, a growth industry over the last several years with the tremendous growth in both oil and gas shales now we've moved away from the growth sectors of the big mutual funds and we have started to see several mutual funds they're coming from the dividend and value sector, starting to buy into our space, and so that's what we want long-term is those dividend paying funds that want dividends long-term. >> scott, it's morgan, i'm going to ask you the same question i have asked the ceo regarding copper last week is crude in a super cycle? >> i don't think so. i didn't think crude is. a lot of rare earth minerals,

copper, aluminum, could be in a super cycle but all is definitely not i'm a firm believer that with the u.s. oil industry moderating its growth that we're taking the biggest issue off the table with opec opec is very pleased and opec plus, and we have been in this range 60 to $70 over the last four months. i think we're going to stay in that range over the next several years. we have taken the biggest issue off the table, and that's the u.s. oil shale growing too much, too fast over the last several years. >> just to, i guess hone in on that a little bit more, scott, we have had these cycles, several of them now really over the last decade in terms of crude prices and what we have seen in the past is that when the price of crude has started to recover and climb higher, so too have the rig counts here in the u.s it seems like perhaps we're at a shift now and certainly from a pioneer standpoint, it seems like that. even as the price of crude

begins to climb higher, your production levels are not following suit you're staying a bit more disciplined. how do you see, i guess, the economics around that, and does it represent a change in the way that u.s. producers like pioneer are now operating? >> yes, morgan, that's a perfect question there's been a tremendous shift when our return to pioneer a couple of years ago, i went out with our executive team, and talked to all of our top shareholders we came up with a new plan to move forward, instead of spending 110% of cash flow to grow over the last 12 years. we're going to be spending 50% growth and limit to 5% a year over the next ten to fifteen years. and distribute that free cash flow back to the investor. so in the earnings call, i actually mentioned that when you look at the amount of free cash flow we're going to be generating, our dividend, once we start paying the base and the variable, when you calculate it,

it's over an 8% dividend there's no reason for this stock to stay where it is. if we're going to start paying an 8% dividend and so it's really a new game plan i think most public ceos are committed to that. it's going to help opec, and opec plus moderate we're not going to capture market share away from opec and opec plus, and so i think we're going to see -- we're taking the volatility question out of the oil price environment, which is one of the biggest issues we've had over the last ten years. >> right you're still looking at, what, 2.95 billion or 3.25 billion in terms of your capital budget, right? i mean, it's not like you're not going to be spending are you going to stick to that, though, regardless of what happens to the price of oil? >> exactly i've made a commitment that as oil prices, if it moves up above $70, we're limiting our growth to no increase this year next year, 5%. so i've been asked the question, if it goes to 80, $90, it's more

money into the investors pocket. >> scott, i want to get your response to what we saw happen in terms of the cyber attack on the colonial pipeline. i realize that it's coming back online right now, and the worst of the situation is over, at least from a transportation of products standpoint, but your response to that attack, how it is -- how that and just cyber events we have seen in recent years in general is shaping or affecting the way you're thinking about your own assets and what that means to the energy industry overall? >> yeah, thanks, morgan. first of all, everybody at pioneer is sad that this has happened we do feel sorry for all the people that are buying gasoline. it's important that people do not gouge in regard to gasoline. pioneer is strictly an upstream player we do not have refineries. we move our product, oil, gas and ngls to the gulf coast the first thing we did is

rechecked our fire walls to make sure somebody couldn't shut our 2000 horizontals down. and secondly, we're checking with major pipelines out of the gulf coast from the permian to the gulf coast can you imagine, permian is producing 4 1/2 million barrels of oil a day in oil. can you imagine if darkside got involved in shutting down pipelines down, and we lost 4 1/2 billion barrels a day. we're checking to make sure their fire walls are totally in tact, and someone like darkside can't do this again. and cyber security is critical it's important. >> what did you find, scott, i mean, when you had those conversations, they're still ongoing. did you get a satisfactory response >> yes, yes. we're getting more and more confident. i'm definitely confident with our department, with our technology department that we have the right fire walls, and we're also getting more confident that all the major midstream companies taking the product from the permian to the gulf coast have the appropriate

fire walls in place. >> scott, really appreciate having you on. it's good to have you on our program. hope you'll come back. >> thank you, david, morgan, appreciate it. >> sure thing, scott sheffield join us tomorrow, darren woods, exxon mobil ceo, we're going to keep talking energy, morgan, andal be tomorrow at 9:40. carl >> david, as we dgo to break. shares of alibaba on the move. close to lows of the year, and almost one-year low after reporting an operating loss since going public the cause was the antimonopoly fine of bli b$3ilony chinese regulators "squawk on the street" comes back in a couple of minutes. stay with us labradoodles, cronuts, skorts. (it's a skirt... and shorts) the world is going hybrid.

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bitcoin did fall below50 k until the wake of the move by tesla. we're going to decode that later this hour. after the break, bernstein forecasting a potential $10 billion problem for apple as those shares are on the rise after falling below the 200-day for the first time in a year we'll talk to the analysts behind the call, next.

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i'm seema mody, and here's your cnbc covid update india's death toll, above 4,000 for a second straight day. a lock of oxygen contributed to the deaths of 37 people at two different hospitals according to local media reports. boris johnson admitted the government is anxious about the indian variant spreading in the u.k. officials are worried the strain could up end plans to ease restrictions in june the president of the second largest teachers union in the u.s. will reportedly reopen for full-time in-person learning this fall. and the international olympic committee supports japan's mitigation members and is confident that tokyo olympics will be a historic event, despite public opposition. soft bank ceo telling "squawk box" this morning he's afraid. >> i am very much afraid of having olympics.

i don't know how they can support. >> he's not the only one questioning the government's decision to move forward i'll send it back to you. we're about an hour into the trading sessions, all of the major averages are bouncing back after the losses we saw to start the week the s&p is up 1.4% let's take a look at the biggest leaders on the s&p right now as well it's lam research, applied materials, but it's also nucor, a steel name, and ralph lauren as well. in terms of the laggards, all of the major sectors are in the green. energy, though, is the under performer and, perhaps not surprisingly, it's largely energy names that are in the red on this first or in this first hour of trade, david. >> yeah, and morgan, of course as you know, a lot of the large cap technology names have been amongst some of the worst performers during this selloff until today. josh lipton joins us now with a look at where people might want to put their money josh >> so david, let's start with

apple, which is higher right now, but we know, of course, it has been a rough stretch for the iphone maker closing yesterday below it's 200-day moving average for the first time in more than a year on pace for its worst week since late february. if there's a rotation, then apple is going to get hit. also, though, some investors question whether it can really sustain the tremendous momentum it's seeing. apple is a buy, though, there's a big pool of iphone fans. he says they will continue upgrading, especially as the 5g rollout continues, and munster bets that mac and ipad will continue showing strong growth in the quarters ahead. another area to watch. the semis also hired early trading, on pace for its worst week since march of last year. bernstein's says the pressure is not that surprising. valuations became stretched after remarkable runs, and during the earnings season, there was a lot of hot talk about continued shortages and

supply constraints having said that, remains a believer in the companies that make the equipment used to manufacture chips, apply materials and lam research, she says are bias. finally, take a look at the hero that's the etf that tracks the video game industry. try to avoid its 11th day of losses in the last 13 sessions acti vision all under performing the market but andrew at jeffreys, bets these game makers will keep growing on the back of strong pipelines, and valuations, he says, look very reasonable a fan of activision and ea back to you all. >> it's a good place to start with our next cap, a new call on apple, seeing some potentially worrisome trends and similarities between the cycle on the iphone 12 and an old cycle with the 6 let's dive in further with bernstein senior research

analyst. tony sagalakis. >> good to see you, thanks for having me. >> what happened with the six because it actually was good for a while, and then created some problems in the cycles to follow, what's your call >> sure. so our observation is there have been free pretty strong iphone cycles over the last seven years, the iphone 6 cycle when apple introduced the first larger screen phones that was a very strong cycle the iphone 10 cycle in 2018 where apple introduced no face i.d. excuse me, face i.d. and removed the home screen button, and had edge-to-edge displays. that was a strong cycle. and then the current cycle, the 5g cycle all of these cycles have had notable similarities, double digit iphone revenue growth, strong improvement in selling prices for the iphone.

and strong growth in gross margins. all three cycles have exhibited these characteristics. our observation is if we look at the two previous cycles, similar cycles, the six and the ten was that the following year, the iphone and apple really struggled. in both cases, iphone was down double digits. average selling prices were flat to down, gross margins were pressured, and perhaps most importantly, apple's stock fell by 30% or more in both cases and so we certainly don't know what next year's cycle is going to be. but our observation is when apple has had strong cycles, it's typically because you have their most enthusiastic users upgrading, particularly in china and other areas of asia, and that's exactly what we're seeing again this time. >> i guess, toni, the question

would be what's different this time, whether it's the degree to which services make up a larger part of their business, wlohethr or not the multiple was a different distance away from the market multiple, are there any things that might emilirate that. >> services a portion of apple's revenue today, and that would mitigate falloffs in iphone. i think on the other hand, though, the mac and ipad businesses have been doing extremely well this year they are both up over 70% last quarter. these are businesses that have struggled to grow over the last five or six years. so while we think services will continue to be strong next year, the challenge is not only about iphone, it's also about the mac and ipad businesses, which have had explosive years this year in part because of covid, and work from home and learn from home. that's sort of the double

challenge that apple faces looking into fiscal 22 >> it's david, when was the last time you were positive on apple. had a buy rating on the stock. >> so we had a buy rating on apple for about nine years, and we downgraded the stock about two and a half years ago >> okay. and what would be an appropriate multiple, then, on your fiscal year 22 estimate to get you to sort of a point where you would think it warranted an overweight >> yeah, i think that's a great question, and one that we struggle with. the multiple has come in a lot since the beginning of the year, and since september of last year apple's earnings have actually improved, and the stock price has gone down. so the multiple, which was closer to 30, is closer to 23 now on 22 numbers, and so that actually makes us all else being equal, more positive, and so i think we have less concerns about valuation.

apple is trading at 10% premium to the market today. historically, it traded at slightly below a market multiple, so the valuation is really not of principle concern. i think where we struggle a little bit is just timing. if there's a risk that numbers could go down next year, it's hard to see the stock being a notable outperformer i think if ultimately estimates come down or the street becomes more aware of the possibility of a week next year, then i think the risk reward on apple becomes more favorable. >> toni, let's talk tesla. given the role in the most recent earnings results, what does the bitcoin backtrack do to tesla? >> look, there are different forces at work here. what we heard loud and clear from investor was many of them like tesla because it's an esg play and buying and owning bitcoin

was ant tithetical to that. i think, to its credit, tesla realized this discrepancy between, you know, there being a company looking to save the planet, and yet holding a currency and accepting a currency that requires, you know, tremendous electricity and has a negative carbon footprint impact and so i think they've done the right thing by acknowledging this discrepancy i think for the company itself, we could argue that's, you know, that's a positive in terms of esg inve tors eyes i don't think a lot of people were buying cars from bitcoin. from a business perspective, there's not likely to be material impact on tesla >> toni, i wish we had more time there's more wood to chop on apple and bitcoin. we'll save it for next time. good to see you again. >> thanks for having me. >> we are keeping an eye on shares of vroom.

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it's time to get defensive in tech says one long time veorinst get his strategy for the pull back on cnbcnation.com more "squawk on the street" coming right up.

it is time for our etf spot spotlight, and we are taking a look at kathy woods ark innovation down 17% since january many of the names including high flying technology stocks, they're getting a bit of a boost today. you can see it fund itself is up .27% woods making headlines this week

after she added three million shares of palatine to the fund a long time wall street bets favorite it's down about 20% since april but as you see, a bit of a gain as well. today, though, both below the ma market >> checking in shares of lowe's, oppenheim to out perform, a price tag of $235. up 3%. the firm saying shares are at a discount despite a strong business model so buy now and after the break, silvergate capital's ceo is going to join us to talk crypto volatility, their partnership on facebook's backed stable coin, and so much more stay with us.

welcome back silvergate capital announcing a partnership with dm networks the facebook backed project known as libra to be the exclusive issuer of its u.s. backed stable coins.

silvergate capital ceo alan lane joins us in a cnbc exclusive interview. welcome to the show. it's great to have you. >> thank you, morgan it's great to be here. >> so much to get to let's start with this news of the day, the fact that you are partnering with dm we've seen the aspirations of dm paired somewhat, and abandoning the approval process in switzerland, focusing more exclusively on the u.s. market now. tell us about how this partnership came about, how far you are in the regulatory approval process, and what this ultimately means for business for your company >> sure. happy to do that we have actually been working with dm for the last several months initially, when they were, in fact, working on the finma license, and we could not be more excited to be where we are today. we worked together with dm and with the various regulatory agencies that we deal with as a

california state chartered bank and a member of the federal reserve, and, you know, we've brought this to the point where we felt comfortable making the announcement, as we said in the press release, we have a little bit of work to do, but we've chopped a lot of wood, and we're almost there >> so at silvergate, i mean, you're one of the really first banks if not the first in the u.s. to start to work with a cryptocurrency community almost a decade ago now silvergate exchange network, certainly seems to be a big focus and a big draw to your cryptocurrency clients i assume that that is what dm is going to be operating on what does that specifically look like and in general, how does it speak to the growth what has essentially, at least according to the reports i have seen, become something of a clearinghouse. 24/7 clearinghouse type service. >> i appreciate the opportunity to talk about what our customers call the send, which is the

acronym for the silvergate exchange network, which is as you pointed out, it is a network, importantly it's not an exchange, but rather it's a network of exchanges, where we connect the digital currency exchanges such as coinbase, and gemini and bit stamp, and we connect them to several hundred institutional investors who are trading bitcoin and other digital currencies as an asset class, and we -- i believe you're right that we were the first bank in the world to bring the legacy financial system that only operates during normal business hours monday through friday and to bring the banking system into the 24/7 digital currency market that trades around the clock, around the orld, and never sleeps, and neither does the send so we are the regulated onramp and off ramp to move u.s. dollars into the digital currency ecosystem, and then to

move it back out into dollars, and it is api enabled 24/7 as i mentioned, and i think it was that technology and the duration of time that we have been working with our regulators in this industry that was really attractive, and you're absolutely right that is what we would be doing, using nri capabilities to mint and burn the dmus dollar code. >> hate to throw the bitcoin environmental impact hot potato in your lap, but i wonder. because our viewers are hearing disparate opinions, one, comparable to the federal government the other side, over time net income on fossil fuel consumption is negative, all things considered. i mean, where do you come down on it? how do you advise a viewer to try to understand that >> carl, i appreciate the

question, and you wouldn't be doing your job if you didn't ask, and we are very aware of the concerns regarding the environmental impacts, and i think, you know, we focus a lot on how are our customers using the digital currencies, the various digital currencies obviously bitcoin is taking a lot of heat right now. i point out elon's tweet last night and said they're not longer going to accept business coin to buy a tesla, however, they're not selling their bitcoin, at least not yet. end of the day, the dm token which is the big news as morgan indicated we announced yesterday, is a separate, it is absolutely a dollar on a block chain, but it is a permission to blockchain that is essentially a

payment system that will enable users around the world to transact in this digital ecosystem, and, you know, the jury will ultimately judge on the bitcoin front whether or not bitcoin is, you know -- whether the usage of energy for, you know, to support and secure the bitcoin network is an appropriate use of energy. we certainly believe it is, but, you know, i'm as worried about the environment as anybody i've got five kids and a bunch of grandkids and want to leave them with a, with not only a -- a, you know, a healthy planet, also with a healthy financial system that's what we're trying to do at sill sprer gate. >> -- silvergate. >> and what you said about dm is so true. cryptocurrencies vehicles for speculation, not actively used

as patyments heard similar comments from treasury secretary yellen as well dm, adds exactly that. a vehicle for payments does it happen is this a monumental moment in terms of the broader use case and adoption of cryptocurrencies and stable coins >> morgan, we believe it absolutely is, and as you mentioned, we've been doing this -- we've been intentionally banking businesses in this currently ecosystem the past eight years. our customers, i mentioned, include clients such as c coinbase, a member of the dm base and teva, shopifying and andreeson left uber. these are platforms that have millions and in some cases

billions of customers who will ultimately have access to this form of being able to pay for things, and i think it's going to really bring the barriers to adoption for a digital currency down and make it equal access for all. >> alan lane, thanks for joining us today. >> thank you for having me. coming up on "techcheck" in a few moments, do not miss bubum bumble and ceo and $43.85, a long way from the opening day trade of $76. plus, that bitcoin move, ad lovin', starts top of the hour, and a lot more we'll be right back. >> announcer: crypto decoded sponsored by --

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new projects means new project managers. you need to hire. i need indeed. indeed you do. the moment you sponsor a job on indeed bauch. baj. badge claim your seventy five dollar credit, when you post your first job at indeed.com/home. markets are rebounding to say the least after the sell-off seen in the last few days. breaking down action with markets commentator mike santelli look at that s&p up 1.6%. >> yeah. in fact all three major indexes up about the same percentage across the board make suggesting

what we have to start a mechanical bounce. nasdaq in particular very, very oversold, short-term technically should have bouncedbounced now s&p back up to a level a couple days ago everyone said, ooh, hope we hold above that level. now a bit of a typical testing back and forth i think one of the key things is, in the sell-off last couple of days, no real indication it was anything bigger than an equity repositioning shock in other words, wasn't credit stress or things going on in macro that seemed to feed into economic fears mostly what will we pay for earnings when crowded positioning and inflation is op an uptick. >> what's the vix telling us right now, mike? >> a little bit of agitation evident yesterday. probably up a little more than you might expect up into the high 20s the fact that it's coming down relative, in a relatively pronounced way could mean we basically have a little bit more of stability returning to the market this is the fourth 3% to 5%

pullback in the s&p 500 so far this year. essentially almost once a month. seen the vix in the high 20s, even above 30 each time. kind of acting the way you expect a little concern about the dynamics yesterday with very, very, very hedging demand. that could be a contrary indicator or say people are pixes for a more choppy phase after all up 90% in 13 months in the sm zp. >> s&p. >> as the day moves along, any group you're paying attention to do see if it's sustainable >> semiconductors. led both directions, way up and down in other words, kind of should be bouncing, and maybe outperforming today. that might be one area to keep an eye on. also the bond market is not telling us much now. yields stable. giving equity market time to sort things out. >> exactly my next question to you, mike. what the bond market is

signaling or not right now and in terms what key technical levels are there i realize another hot inflation report this morning, specifically on the producer side of are things. >> not not unexpectedly so really that's key. >> mike santelli thank you. that does it for us here on "squawk on the street. "techcheck" starts right now. ♪ happy thursday welcome to "techcheck. i'm jon fortt with carl quintanilla and deirdre bosa ahead, elon musk slashes and does it ride on one man's comment. and look for safety and opportunity in today's session. finally, whitney wolfe herd, bumble co-founder and ceo joins us