♪ ♪ good morning welcome to "squawk box" here on cnbc i'm becky quick along with joe kernen we have been watching what happens with the equity futures. yesterday was a little bit of an interesting day. we saw down action this morning, the green arrows across the board dow indicated up 57 points s&p futures up by 11 nasdaq, the one to watch today, up by 102. joe, questions being asked about whether things are really over for tech or if that was a blip last week. we should look quickly at what is happening with the treasury yields the 10-year is yielding 1.647% sitting at the high end of the

range. home depot out with quarterly results moments ago. earnings came in at, get this, $3.86 a share. that is compared to a consensus estimate of $3.08. revenue and store sales beat estimates. we have to tell you the comp store sales. it looks like home depot's same st store sales up 31% u.s. comps up 29.9%. for instant reaction, let's bring in brian nagle brian, this release is short, short but sweet. incredible numbers people keep saying when are the gains going to quit? what do you say? >> good morning. i agree. this is another phenomenal report from home depot becky, the term i used is the rubber hits the road that will happen right now

this is when the come sparisonst more difficult april to may, it gets difficult. we will see what the company says on the conference call on the business trends. this is where you see the sales game slow. >> you know, i look at the stock chart down 32 cents. let me repeat this earnings of $3.86 versus the $3.08 the street was expecting revenue of $37.5 billion which is about $2.5 billion more than the street anticipating and beat on same stole re sales what would it take to see that stock trade positive today >> a great question. this was very well telegraphed i put a note out to clients last week about this. whatever data we can get our hands on, you see it is clear

that sales would stay strong it is important to point out, we talked about this on your show home depot sales have been strong for four quarters this was very much a covid-19 winner what is interesting here in the first few months of 2021, sales got stronger whether a benefit or stimulus, this was well telegraphed, these numbers. >> so, what do you want to hear from the company today this release is short. there is not much forward looking guidance of any type what do you want to hear from the company in terms of what they are seeing in the stores ri right now? >> i don't know. home depot is something i discussed a lot. this is true for the companies they don't know what lies ahead. how the business will perform as it pulls out of the covid crisis to answer your question, any sign any sign that the business is beginning to soften?

or to the contrary evidence that the business remains strong the other issue and i did not mention this because what is happening with inflation i talked about it with the clients. modest inflation is good for home improvements. i think in some cases, lumber and other metals, we are well past modest inflation. this could become the point where demand is structure. are they seeing evidence of people pulling back on projects because the costs are too high and we didn't see it with supply chain disruption a lot of issues on the water and ports. is that hurting home depot could that hurt home depot in the coming quarters? >> what do you do with the stock right now? >> i'm cautious on home depot. i'm a huge fan of this company i think we get the stock kcheape in the next few quarters i made this call last week with

lowe's lowe's will contend with the same issues. we hear about their numbers tomorrow lowe's is the cheaper stock. a lot more operational slack within that business model self help store. as we get through the next quarter, it will be challenging. lowe's if you own one of them, lowe's is the better stock. home depot, i would stand on the sidelines right now. >> what is a pe for lowe's >> depending on the earnings trade around 20 times. 5 to 6 pe for lowe's that is historically wide gap. >> brian, good to see you this morning. we will watch for lowe's tomorrow we while hear from walmart and macy's later this morning. thanks for the instant reaction. >> thank you for having me on. i appreciate it. andrew >> okay. coming up, when we return, time

for whale watching including a big move in warren buf buffett's long time holdings. and an update on ark invest. etf's cathie wood's firm saw a net loss of $1 billion in a single week as rising inflation cause concerns and ark innovation fund down 17% this year. we're right back after this. >> announcer: this cnbc program is sponsored by ibm. the world is going hybrid with ibm. with a hybrid, you can do both. that's why manufacturers are going hybrid with ibm. with watson on a hybrid cloud factories can use ai to automate the little things so they can focus on the next big thing. businesses that want to innovate at scale are going with a smarter hybrid cloud

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welcome back right now it is time for whale watching regulatory filings of moves for berkshire hathaway it sold almost all of the stock in wells fargo berkshire reduced stake in wells fargo in 2017 and it slashed other bank stakes in the last 12 months buffett talked about this at the annual meeting as you headed in the pandemic, you didn't know what would happen with bad loans. now berkshire owns 12% of bonk of america that is next

and berkshire bought 4 million shares of aon. berkshire ramped up bets on kroger by 50% to 51 million shares b berkshire invested in 2019 and while grocery stores have not had great margins, kroger was a good bet during the pandemic berkshire added 8% of verizon and cut the stake of chevron by half verizon stake is built up rapidly. chevron, interestingly, cutting it by 50%. chevron holdings now down $2.5 billion. that is the stake they recently went into as well. that may catch people by surprise andrew the other one that is interesting, becky is stan loeb. the palantir trade in the first quarter. 2.3 million shares of the data

company. loeb added 5.1 million shares of paysafe. it went public by spac in q1 trimming positions in amazon and alphabet and added shares in microsoft. the funds in pintopipintopipintb and alibaba. joe. druckenmiller's duquesne took a position in citigroup it took a smaller stake in jpmorgan chase maybe they will start making more money if yields end higher based on some of stan's comments duquesne added to starbucks and

expedia and took a $70 million in booking holdings. duquesne liquidated disney and carnival cruise line andrew. >> you can see what they're playing. that is interesting. michael burry now revealed a short position against tesla a lot of folks have shorted tesla over the years and few made money doing it. burry was one of the first to recognize the profit from the subprime mortgage crisis he revealed his long puts more than 8,000 shares of tesla are worth $540 million it is a bet the shares will, of course, fall burry mentioned in a tweet that tesla's reliance on regulatory trem credits is a red flag.

he has since deleted that tweet. a lot of people have long questioned the valuation of tesla. it has gone up and up and up i don't know i don't know, joe. >> i wonder what thestrike price is at the time end of quarter we know what month we're talking about. i wonder if they are in the money already or out of the money. interesting to know. he probably has a series of them i wonder if he has 300 300 strike price 5 and change or he could have put it at 600 every point, he's in the money already, as it goes below 600. >> right coming up, a nice problem to have california deciding what to do with a budget surplus. robert frank has the report next. and later, some states are not accepting the cdc mask guidance we'll show you the new decisions

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california's state coffers are overflowing. a growing debate how to spend the surplus. robert frank is joining us with more burning a hole in their pockets, robert >> reporter: yeah. amazing, joe a year ago, california was projecting a budget deficit of $50 billion. that was the worst since the financial crisis instead, a uss plus of $76 billion. that is more than the state budgets of pennsylvania or

massachusetts. the reason ipos soaring tech stocks and stock sales by founders and venture capital firms. top is% of california earners pay half of the income taxes and a lot of their income comes from capital gains. a quarter of the more than 400 companies that listed shares last year were from california with tens of billions of dollars flowing into california coffers. the state will also get about $25 billion from the federal stimulus in addition to the 76 bringing the total to over $100 billion. joe, what to do with the extra cash governor newsom plans to send checks to all californians who make less than $75,000 a year. it is unclear how long this windfall will last the population declined by 182,000 people last year

the first population loss in recorded history joe. >> so, wait a minute trying to sort all this out. you are saying that a successful private sector has generated tax revenue you for the state. is that what you're saying >> reporter: yes that is what i'm saying. far beyondexpected >> here is my question that's a lot of money. are these outsized taxes going to cause some of the people, proverbial gooses laying the golden eggs, to exit we have seen some move to texas already. >> reporter: as i mentioned, last year was the first time in recorded history that california had a population decline we don't know exactly how many

of those were high earners it appears for right now, given this tax windfall that not enough of the wealthy have left to damage the tax base these are capital gains from 2020 maybe they will declare tax residency for somewhere else for 2021 for right now, the wealthy taxpayers are holding up california and calling the gold send golden state stimis. $1,100 in a golden state stimi if you make less than $75,000 a year s year >> robert, this is not just the private sector these are wall street-hinged items. ipos and stock sales

the surplus is coming from wall street horrible those greedy, self-centered people are wall street, are generating some of this. >> reporter: here is what is amazing. people are talking about the decline of california. we heard executives talk about that 25% of all companies that raise capital in the markets left year f last year, from ipos to spacs, 25% were in california that is to the counting the capital investment firms not ba based in california. that california wealth machine which is tech and venture capital had huge gains in the market last year thanks to the fed and the recovery and vaccines and everything else that california wealth machine is skill very much in it tact and very reliant on the taxes

which is capital gains >> robert, not to mention they are doing this and handing out checks to everybody because they are so wealthy right now. at the same time, they are getting $25 billion in federal stimulus >> reporter: yeah. that is what is amazing to me. 76 just from the tax surplus and gavin newsom in the middle of the recall vote and you could not write it better. he is funding education and funding rent and utility bills for people you can basically fund every dream of that state government that they want to fund the question, of course, especially if we get an increase in the federal capital gains rate which could dry up capital gains realization and sales. that could hurt revenue in the

next fiscal budget you then are counting on the money you no longer have >> nothing like saving for a rainy day. >> just to get it out there. can you send a memo to bernie, liz, maybe aoc and highlight this factor this into your thinking next time. next time you are democagoging n pontificating? you want me to do it >> reporter: i'm sure all three of them are watching right now they love cnbc i'm sure they are watching they heard they know. >> maybe they are trading crypto as they are watching >> reporter: exactly >> like some have done in the past robert, crazy. minus 50 to plus 75. that is deep billions that's a turn around

i was surprised to hear the story when i was introing it i thought they had blown all of it thanks, robert becky. i'm sure it will be smooth sailing from here. when we come back, we will talk about the allout for the media sector from yesterday's at&t/discovery deal. now amazon may be looking to buy the studio behind 007. that's next. and let look at the s&p winners and losers from yesterday as we head to break. 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. you packed a record 1.1 trillion transistors into this chip

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good morning a little bit of a weak start for the week for the markets the dow was down, but less than .20%. nasdaq was down .40% you can see everybody turning things around and pushing up this morning dow futures are up 95 points right now. s&p futures up 12.

nasdaq futures indicated up 90 points. fisker reported a loss of 63 cents a share. that was worse than the 19 cents analysts anticipated. yesterday, the founder henrik fisker says they don't plan to invest in bitcoin. he says it is not environmentally friendly and doesn't align in sustainable vehicles that stock was under pressure. you can see bitcoin after pulling back sharply up over 2.3% $45,000 versus the $60,000 we had seen just a few weeks ago. >> yup 62 at one point, i guess got as low as 42 and change. did you see before i get to this

ethan allen? did you see that people making that connection? eth. i saw it i don't know if it is true >> instead of ether? >> yeah. >> no. >> the stock has been on a tear. if you go back further than that -- someone made the point. >> except all of the furniture companies have done well because people are spending money like never before in all of these places >> yeah. do not buy because of that. >> it is stupid to think it is ethereum >> we have seen things before, though. >> remember amc? two amcs >> amc network and the movie theaters that's a -- i don't want to disparage people saying that is why they are buying ethan allen. >> i don't know. we're watching it. crazier things have happened

i'm not going to say it. i'm not a suit i don't have a jacket on crazy things happen on the reddit boards. >> you're wearing a tie. >> we're watching shares a tie. watching shares of twilio. company plans to acquire business texting platform zipwhip for $850 million in cash and stock. i like putting zipwhip on ice cream. zipwhip would expand the high quality traffic. >> you might be that stupid? >> i might be that hungry. zipwhip. >> all right homer, mm, doughnuts. let's do the mask guidance home depot with the new cdc guidance and will not require masks for customers. speaking of state rules,

governor cuomo says the state will end the mandates and adopt the guidelines for fully vaccinated people effective tomorrow masks are required for public transportation and schools and health care facilities connecticut also planning to lift its mask mandate. emer new jersey will not. governor murphy will require them at restaurants and indoor venues he said it was unfair to put the burden on businesses and employees to try to determine who is vaccinated. new jersey is relaxing restrictions bringing back in-person learning in the fall. no masks on this side of the bridge joe, when you go home and, becky, masks it sounds like. >> we're so used to it. >> outside, it has been interesting. outside just watching it over the last four or five days since the cdc changed course it went very rapidly from people

still standing outside school pick-up line wearing masks to afterwards at sports things and nobody wearing masks anymore. >> right >> kids are. that's the weird thing kids required to do this and adults aren't? how do you sustain that for the next four or five months >> you know, have you guys been in a bank? you don't. atm and online banking i was in one because it is hard to find a teller they are so rare >> there's a joke coming you wore a mask? >> it is not a joke. i won't waste time it just felt a little weird. in there masked up in a bank that is, you know -- >> and the banks used to say you can't wear sunglasses because we need to see you to know what is going on. >> and people are fully masked

i don't know when the last time i was in a bank. we don't really do that that much atms for deposits or online. i went in and i mentioned it to the teller you know, for an i.d. -- >> i'm wearing a mask, but i'm not here to rob you. >> how do you know this is me? i'm showing you an i.d you can't tell it is me or not problematic. i'm sorry about that let's move on. you're right coming up, we actually have an important story to talk about. we will dig back into the media merger between at&t/discovery and all of the reaction to the deal plus we dig into the potential for more deals as a result, perhaps. reminder, you are watch or listen to us live. you can do it now on t cc henb app. we're back after this. gical num. and it's not something we just achieve at the end.

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welcome back multiple reports say movie studio mgm is in talks to sell to amazon. that's the studio behind james bond, rocky and robocop. it has been looking for a buyer for months $9 billion is the floated asking price. the chairman showed the content to the amazon team on friday of course, amazon has plenty of

cash sitting around. andrew meantime, thanks, becky. let's talk about the potential deals for the media sector as a result of the day when at&t and discovery reveal the plans to merge warner media with discovery. joining us is carrol at the wall street journal good morning to both of you. craig, i wanted to start with you. i want you to think about the chess pieces here. i know you have strong views of at&t's an role in everything that's happened. how do you see the chess pieces on the table as they are today now? >> good morning. thanks for having me, andrew look, i think the question that people started to jump to immediately yesterday was for the major players who are left out here comcast and viacom

what do they do next and what is their next chess move? you know, everybody is trying to get scale to be relevant compared to netflix, disney and now discovery/warner media people left amazon out of that equation i think amazon simply because of who they are and how deep their pockets are had to be considered yesterday as one of the real survivors here mgm is an interesting move it brings a library, not a lot of new content development, but speaks to the role that amazon is likely to play over the next five years or so in really building a streaming platform that will be very much one of the majors alongside disney and netflix. >> okay. kara, play this out. if we have now amazon, comcast, viacom, then the smaller

players -- by the way, some people think they are a small player you can go buy mgm or sony we have not thrown apple into this or google into this, which you could also put into the mix or youtube and the like. how do you see this playing out? if you are viacom right now, do you say you have to sell yourself to somebody else or you have to buy somebody else. do you have to buy somebody else >> that's a great question i remember after the viacom/cbs deal, we had similar conversations of what would happen after that. now discovery has made their move bankers are hoping it creates a fomo effect on the companies if you go down the list of the

names. comcast and viacom are the names everybody are focused on now. >> craig, would the market cheer if brian is buying or if sherri is selling >> andrew, the issue is the verbage you talked about there buy. the combination of comcast and nbc universal unit with something of scale to give it a little more heft i don't think tiktok can be considered one of the major winners here yet it is not big enough and not global enough yet. i'm not sure they would like the structure eveof buying it the fit with viacom is problematic. not to say there is nothing there to help. when discovery sold off yesterday as the course of the day went on, it was through the

gradual acknowledgment of the day that as sexy as the streaming platform is, there are a lot of old assets. tbs and tnt. they are structurally poorly positioned that they have to manage the same if you put viacom and comcast together you have two overlapping networks and from anti-trust, you cannot have that and have to separate those the studios work well together, but not as well as the warner brothers studio with universal it is not really is ideal fit in some ways. >> craig, let me follow-up and ask you this if you think a big deal doesn't work if sheri redstone or brian roberts announced we will build, not buy. we will spend $10 million or $15

billion a year creating content. we will overpay for the next great nicole kidman limited series and buy our way into it the same way netflix originally did. take on debt to do that. would the market reward that or would they be furious? >> you know, i think the market probably wouldn't love it. the market would be appro appropappro appropriately skeptical how feasible that is at the stage of the cycle. andrew, let me say one thing the pairing up of viacom/comcast is not on the only potential dance partner for comcast. it seems to me that if you are brian roberts, you say warner bros. would have been an ideal fit. a lot of good things that would have gone together from anti-trust perspective, i'm

not sure he wants to insert himself in that transaction or bid for it or break it up. the best thing to do is the olympics is coming up for peacock. let's make peacock relevant. when we look at this in a year or two years or three years from now, it may be the relevant set of partners is not viacom, but what if amazon decides they want to gain real scale now and they become a ptial suitor for the nbc universal business or anti-trust regulators are forcing amazon to sell something and amazon studio assets become available? there is a lot of ways this can play out i think the best thing for comcast to do is stick to the knitting and make peacock a relevant service it really hasn't gotten there yet. >> cara, the talk yesterday afternoon was, of course, the

news of amazon interested in mgm. the question is does somebody else try to jump in and buy mgm? mgm has been on the auction block for a very long time now >> yeah. that's always a possibility, of course like you say, mgm has been out there clearly and primed for a deal should anybody be interested for a while now i'm not sure this particular report will prompt interest where it hadn't been before necessarily. >> finally, craig, just speak to the market reaction.eluding to . when we spoke about the transaction yesterday morning on the show, discovery stock was up over 17% at one point. as you saw the day progress, things got progressively worse what do you think the true realization was there?

>> it is this obvious and really intense battle between what is real and what is the dream the dream is obviously these assets fit together well discovery brings international strength hbo, in particular, brings scripted strength and a lot of domestic strength. together, they are much stronger the streaming platform, i think, the initial reaction was just how good that streaming platform could be i don't think that was wrong over the course of the day, i think what started to dawn on people is let's not forget the same problem that at&t had which was that out of the ashes, this phoenix will rise. there's a lot of ashes there's a very, very large structurally challenged issue of cable networks that is really tough to offset or grow out of while you try to grow this

digital business i think that's unfortunately the challenge for the whole media business you end up with the set of crossing lines and the good parts are great, but there's a lot of legacy revenue and profitability there that is challenging. >> craig, we have to go. you want to own at&t right now >> nope. with the dividend cut yesterday, the market was demanding a 6.5% yield before it had a growth kicker from hbo max in it. why is the market going to accept a 4.5% yield without the growth kicker from hbo max the profile is still the same or slightly worse. >> craig and cara, great to see you. the m & a dance is not over yet. joe? >> we saw comcast running up to near all-time highs in recent sessions, too, on analyst

comments et cetera. comcast was down 5.5% yesterday. everybody said, wait still a lot of legacy media around then how much will it cost to win at streaming how much will it cost for everybody to win at streaming and what are the margins with the competition? all of a sudden, wow it's like the good news and bad news you get all of the time warner assets that's the good news what is the bad news you get all of the warner media assets >> we'll talk more about it later. >> there is a lot of old media still there and streaming. what percentage is it at this point? craig nailed it. coming up, more on the big media merger with at&t and discovery. we get a look inside the boardroom from two at&t board members with their take on the deal

glenn hutchins and geoffrey yang first, the futures nasdaq up 88 we'll be right back.

despite the recent slide in big tech, it's one of the sectors our next guest likes like financials. a barbell approach gabriella santos is joining us you and druck with the financials stanley druckenmiller, pretty good company explain how is there not mutually exclusive, tech and

financials how does it factor into your thinking >> that's right. good to be with you, joe i think what's really working in the markets to realize that we've been through a third phase here of this new market cycle. the first was all about the virtual world from march to early november then we started a new phase from early november to early april. all about the return of the real world. now tweer' in a third phase where we're thinking a lot about the expansion. what do the next few years look like there is a moderation in growth with the u.s. economy settling back to a normal growth pace of 2% that's where something like technology and growth themes come back into play. a second aspect of the new cycle is a lot more up side risk to inflation. something we have not had for the past decade that argues for continued steeper curves that's where a sector like financials comes into play and

taps into this change in the cycle. and then there's a third aspect to this also which is thinking about where in other markets we're still in an earlier phase of the market cycle where enthusiasm to the recovery is just starting to build this is where we come to the conclusion that it makes sense to have an over weight of this moment to more cyclical regions like europe and japan and to compliment the u.s. exposure as well. >> a couple of times we've seen some of the biggest winners of the pandemic, seen a little bit of disappointment in i'm thinking maybe a netflix, disney you would think disney is the greatest reopen play in the world. yet disney+ still effectively has to move. you could make the case they've gotten ahead of themselves although some, as you point out with technology, they're going to keep the gains made during the pan dem mdemic but they've

out. you need to factor that into your thinking. >> i think so. you need to consider valuations once again i think we're really at a phase where we're talking broad sectors in tech, financials. it becomes much more of an intersector conversation where our valuations are attractive or not based on each individual stock. which companies are competitive in this new expansion or not, which ones are price takers, which ones are price setters in a much more mid cycle mature phase where it's really more about intersector company by company differentiation. we're in a much more advanced phase of the market cycle in the u.s. >> what would you say that the next year's multiple looks like on tech or the nasdaq? just in general. is it a reasonable multiple? that's been made to me 22, 23 is

not that out of line given the prospects. >> yeah. so we have been thinking this is really going to be a year where earnings catch up to the multiple all about multiple expansion, expectations of future improvement. this year it's all about reality catching up to the expectations. growing into the multiple of last year. we expectthe multiple to come down a bit for the s&p 500 we're at 22 times. that multiple should be coming down as the year progresses. we saw that with the first quarter earning season, for example. you had a big improvement going into the season. huge beats both on the top line and the bottom line and yet the stocks didn't react. that's a sign really that these companies are growing into their advanced multiple. we should expect that to continue second quarter earnings season is going to be amazing just not going to get that big bang for our buck in terms of

the actual stock reaction. some multiple contraction this year there's a limit to how far it can fall given how large it gets. >> gabriella, thanks a proud penn grad. quaker see you later. >> that's right, joe that's a throw back. >> yeah, sorry see you later. thanks when we come back. bitcoin's wild ride continues. mike novogratz breaks down what you need to owkn about the most recent round of volatility "squawk box" will be right back. in business, it's never just another day. it's the big sale, or the big presentation. the day where everything goes right. or the one where nothing does. with comcast business you get the network that can deliver gig speeds to the most businesses and advanced cybersecurity

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stocks set to rebound. we've got the numbers and the market reaction straight ahead. bitcoin dragging down names that hold the crypto on its balance sheet. will that move make the companies rethink investing in crypto companies

mike novogratz joins us to discuss. plus, senator rob portman and why people need to get back to work. the second hour of "squawk box" begins right now good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. futures at this hour. the dow looks like it will open up 74 points higher. nasdaq up 82.5 points. s&p 500 looking to open 10.5 points higher. becky? >> we do have some earnings numbers just out from dow component walmart. let's get over to courtney ragan. she joins us with more hi, court. >> reporter: good morning, becky. big beats here on the top and bottom line for walmart. the retailer putting up earnings

of $1.69 adjusted. that's estimates on revenues of $138.31 billion versus $131.97 billion. walmart updating the forecast. not actual numbers, ranges there. walmart's u.s. comparable sales up 6%. that's about 6 times as strong as analysts had forecast it's also pretty impressive if you note that the prior year's first quarter comp, that was that big pandemic stockup quarter saw comps grow 10% that's 16% on the two year stack. net ecommerce is back down to earth at 37% i spoke to walmart's cfo brett biggs who said stimulus helped in q1. because of that we increased profit and revenue guidance.

what we are seeing in q2 is part of the reasoning as well biggs also said i think overall the consumer is in good shape. there's a lot of money out in the system we're seeing spending rates healthy. savings rates near all-time highs. we still believe there is pent-up demand what kind of pent-up demand? for bicycles, printers, you can tell people are starting to get back out, buying things like teeth white ner. back over to you. >> coming out from behind the masks. probably lip sticks are up on that, too. >> exactly exactly. court, what happened i mean, why did analysts expect same store sales were only going to be up 0.9%, up 6% probably not a huge surprise when the company was up in guidance and the stimulus kwleks out. >> it's

walmart analysts have been all over the map they were looking at the stock up from q1 and weren't sure exactly how much they were going to hang on to when it came to the comparable sales number. brett biggs did note grocery share did also grow. that's more than half of walmart's revenue. that's really important. perhaps the analysts were expecting that share to grow even further a little bit off on the estimates compared to what walmart actually put up. you can see shares bouncing a little down a little in the beginning and be now up about 1.5% in response to this report. >> one of the things that wall street's been waiting to hear about iswalmart plus any indication in the release on this or is this just something you have to wait for the call to hear more about? >> i think we're going to have to wait for the call to see if they're going to give us any indication about walmart plus. i have a feeling they're going

to say it's early days we're encouraged just my gut feeling. the way things have been going for walmart lately it's sort of the way they take it in the early going without giving us a lot of specifics we'll have to wait to hear more about wam lmart plus on the zbll thank you very much. as you mentioned, the stock up by 1.6%. we should also mention we'll be hearing more about the consumer tomorrow that's when we get earnings coming in from target. we do have an exclusive interview on "squawk box" with target ceo brian cornell joe? >> thanks, beck. walmart plus, that's their streaming service? what is -- >> no, no, no, it's their equivalent of amazon prime you get special additional thing. discounts on the gas station. >> wait. wait y. would amazon and walmart -- it's all so confusing. maybe -- >> they are booming.

you know about the ticktock tie up for walmart, the thing they've been interested in doing. things are definitely moving in different directions this is kind of their answer to amazon prime, a way to get more information about their customers. >> no content yet. no programming. >> coupons, discount on gas at walmart stores who knows down the road what they're doing. >> no content. >> learn much more about their customers. the expectation is they probably have somewhere between 8 and 9 million customers that have signed up. maybe we'll hear more about that, maybe we won't amazon prime launched all the way back in 2005 they have 200 million people using amazon prime a lot of ground to try to make up it's their way to really get to know their customer and have much more information about them >> my cable bundle is now a streaming bundle we should start a company where we put out -- i guess we can't isn't it -- it's like the same thing. now i have a streaming bundle.

i have too many of those. >> now you have a streaming bundle and a cable bundle. >> a streaming bundle and cable bundle. >> because you're paying for both >> jesus, there's nothing wrong with watching john wayne here's what's -- >> that creepy clown >> there's two of them they have interviews there's two of them. they're on competing -- i love true crime i've mentioned that before this hour home depot reporting first quarter profit up 3.86 a share beating the consensus estimate home depot continued to see the elevated demand that had been prompted by the pandemic macy's also reporting this morning earning an adjusted 39 cents a share for its latest quarter. analysts have been looking for a 41 cent off. comp sales more than 36%

amazon to buy mgm. the price to be discussed said to be in the 7 to $9 billion amazon would hope they would boost the offerings. bitcoin saw record outflows according to new data from the digital currency manager coin shares out flows total 98 million coin share says that that money largely went into competing digital currencies like ether and dogecoin and then, sorkin, have you seen this mayor stuff have you -- >> ether >> the producer was going to have a reader on that before i even -- have you seen "mayor of east town" yet >> i have watched the first four epi episodes i think the fifth was on sunday night. i have not seen that yet because it's past my bedtime, as you know. >> amazing amazing. >> i was up sunday night dealing

with discovery. >> don't read anything about it. i saw it yesterday just don't read anything about it watch it >> i'll give you a call after i finish joochg coming up when we return, airline stocks were cleared for takeoff, but they've since been stuck on the tarmac as vaccines become readily available. has the pandemic play teetered out? two at&t board members, glen hutchins joins us at the top of the 8:00 hour and geoffrey yang is our special guest "squawk" returns after this. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. it's got to be something rkday. workday. i think i got something. work... hey, rob, you're on mute. hello! hey, rob, there he is.

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welcome back, everybody. airline stocks are in a bit of a holding pattern. shares of the major carriers are down over the last two months. joining us to talk about whether this part of the reopening trade has topped out is helaine becker what do you think? people are finally getting back out there, traveling again and yet the market may be anticipated all of this and ran it up ahead of time. what happens next with these stocks >> exactly thanks, becky, for having me on. so i think we've needed to pause here a little bit. while the revenue side of the equation starts to catch up with the anticipated i guess

breakout we've been calling it a jail break for the summer we saw 1.8 million people travel on sunday. we think that from memorial day to labor day we're going to see between 1.4 and 1.8 million travel and then we think we'll start to see fares go up. i think that's the only solution until we have more destinations that we can go to, until europe opens up and until we see business traffic return, which we're kind of thinking starts to happen in the fourth quarter when people go back to school and so on. we expect we'll see business traffic end the year down about 60% versus where we are now, down about 80% so as that comes back i think we're going to get back to the next normal. down 60 is better than down 80 >> right when you start -- >> is that why you're laughing

>> a massive improvement shows you a little bit about how things are going the reason that's so important, business traveler, the international traveler is because that's where the real money is made for most of the big carriers. >> exactly so. so we have thought for a long time that it would be so much better if everybody made their money off of leisure travel and luring in the business traveler was the benefit. it's the other way around for the three big guys, right? they make all of their money flying business travelers at the last minute. i think some of that travel is not coming back. you guys have talked about it with, you know, the ceos of the various airlines i think that you'll see, you know, instead of going to, i don't know, 6 conferences a year you might go to three. instead of five people going to a meeting you'll only have two some of the shorter meetings that can be done on zoom or via conference call will get done that way but i think for a lot of reasons we'll see at least 80

to 90% of the business traffic come back as people get back to work i think people really miss that contact. they miss people and so on i think it just -- i just think people want to get out of their paradise business. >> so if that's the case, you mentioned the big three. we're talking united, delta and american if they are so reliant on that, are there other places where you look at stocks -- airline stocks and say, okay, this might be a better place one of the discount airlines, a southwest. anybody fare better than the big three under the scenario >> exactly so. we like allegiance, spirit, frontier those are -- yeah. those are the three big discount airlines they have 8%, 9% of the market we thought that they'd have about 10% of the market by now so they have a lot of room to

grow to your point in europe, ryan air, easy jet, so forth, they have half the market there's lots of growth for three companies in particular so southwest, we really like southwest. the issue i have with southwest it's back to prepandemic stock price but we're not back to prepandemic revenue or earnings for that matter. we think we need to get there for the stock to take the next leg up you we're pretty positive even though we think the big three need to pause and wait for revenues to catch up to where the stock prices are >> what about hiring

how much of a problem is those who have furloughed employees? >> some of them did and the big -- you know, the government gave the airlines lots of money to keep people employed, right we looked at that as an unemployment program for the airline industry administered by the government and they kept flight attendants and they kept pilots, mechanics on board and so when the recovery started they were really able to increase working hours for their employees. the pilots certainly were already trained. it could take up to a year to retrain a pilot. having them on staff was really important and it has enabled the industry to help with vaccine distribution and so on alaska air, they have done most

of the distribution of the vaccine in the state of alaska north of fairbanks there's no road system. everything is via air. so to get that distributed they've relied on their aircraft but the thing that we're kind of concerned about is the airport personnel. i think the furloughs or most of the airlines tried not to furlough people, they tried to ask for early retirement, voluntary leaves for those people, a lot of them probably did go on to other careers, especially corporate, and i would think as we come out of this, we're going to be in a pretty good position from a margin perspective the airlines have done a lot to cut costs and i know you're asking specifically about hiring airline jobs are pretty well paying jobs. i think people would want those

jobs i would think that they always have lots of people applying because they're so -- i mean, they're so much fun, right as you move up the corporate ladder you get to travel places and i think that that probably makes a lot of people want to work at airlines i don't think -- >> good to see you. >> good to see you too thanks, becky. >> no, go ahead. >> i was just going to say i know you've been talking about hiring and how hard it is at the lower wage rates but i think the airlines in general pay pretty well thanks again, becky. >> okay. good to see you, elaine. thank you. coming up, a conservative nonprofit rolling out ads that are designed to fight what the group calls woke capitalism. good luck. eamon javers has the details after the break. litter bitcoin falling to

almost 42,000, almost below but didn't quite over the weekend. trading at the lowest range in more than three months it may have gone 41.6. is there more down side ahead or kes crypto hit the floor mi novogratz what will he be wearing today? "squawk box" will be right back. obsession has many names, this is ours. the lexus is. all in on the sports sedan. lease the 2021 is 300 for $369 a month for 36 months. experience amazing, at your lexus dealer. 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.

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conservative nonprofit is pushing back fighting what it's called woke capitalism the horse is out of the barn toothpaste is out of the tube. can't put humpty dudumpty back together again they want to reconsidering what's taken place over the last year they will be sharply critical. the whole campaign is designed to force companies to reconsider

some of the political stances they've taken. the nonprofit group behind it all is consumers research. they're not going to disclose the financing of this program. we don't know who's spending all of this money. take a look at one of these ads. they look like political campaign ads they'll criticize doug parker for high pay during layoffs. they'll target james quincey they'll criticize nike ceo john donohoe. mere's what they had to say about their message. >> increasingly they're taking positions on legislation that has nothing to do with their business and this is at the same time as their quality and services are going down. >> reporter: the flash point here is the voting rights laws

in texas and georgia in particular american airlines had this to say about their position they said as a texas-based business we must stand up for the rights of our team members who call texas home and honor the sacrifices made by generations to protect and expand the right to vote real flashpoint issue here, joe. this group trying to turn the debate around a little bit, at least give some of these ceos something to think about from the right as opposed to the criticism they might get for not acting the ceos very much caught in the middle. >> those are sticky points obesity and coke companies that do a lot of business in china is another so that's going for the jugular with some of these pointing out some of the hypocrisy. we're all part of the same hypocrisy, right, senator? "god father ii," eamon. >> i just rewatched that the

other day, it holds up. >> doesn't it, pacino. >> it really does. the idea is you're going after these companies on unrelated issues you talk about obesity in children and that's not really related to the flash point voter rights issue but when you think about it, this is sort of a welcome to the nfl moment. if you are going to engage in politics, you might start to see people treating you like a political figure which we haven't seen with ceos in this country. you'll get the negative oppo style ads running against you. making the point you're willing to talk about politics in the united states, how come you're not willing to talk about political abuses. >> do you have that guy's phone number, eamon? >> yes >> his email >> reporter: yes that's part of the job >> we're going to put him on is that all right with you >> yeah. >> you don't mind? >> i'll talk to him after the

segment. >> eamon, who's financing what he's doing >> yeah, that's what we don't know the group is a non-profit and they say they respect donor privacy so they're not going to say who's paying for all of this that's a big unknown it's over $1 million. >> it's an anonymous effort. >> right. >> an anonymous political effort fascinating. >> that's right. >> do we know it's not satin, eamon? is it not satin? >> conjured up i'll let you report that out >> thank you >> joe, i think we should have him on if he'll disclose who's paying him if he won't disclose who's paying him, we shouldn't have him on. >> does it matter which conservative organization, andrew they're all bad. does it matter which one it is >> no, but i think it's important -- look, i think we --

it's important to know who's financing this >> right. >> always got to follow that >> the rest of the bottom, bad, less bad, very bad. >> still to come right here on "squawk box," 30%. >> mike novogratz and his take lower on what he thinks is going to happen next well, let's be honest. we'll talk to him. later, senator rob portman, important to get people back into the work force. first honoring asian-american pacific islander month, we are spotlighting our own anchors and reporters. here is cnbc contributor tom lee. >> being racised as a second generation korean, my parents were very inspirational. my dad became a successful

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walmart shares up 3% home depot up 2% macy's up 6% better than expected walmart helped a long by strong grocery store sales. home depot helped by bigger ticket prices. macy's, better comparable sales. watch the retailers in the pre-market trade watching what's happening with shares of tesla. the number one story right now on cnbc.com, the top trending

story is about famed investor michael burry and his over half a billion bet against tesla shares owning put options, bearish put options against tesla. the shares are down 1% they were down in yesterday's trade as well. a big performance over the last year still from highs down roughly 36% from those levels. remember, at one point this was a $900 stock earlier on this ye watch tesla, michael burry short. at least he was at the end of march. commodities, lumber specifically we made a lot of big deal here of the fact that lumber grew precipitously over the course of the last several months. now it's on a six-day losing streak and down roughly 23% from the highs that we saw. just, again, six sessions ago. lumber futures, yes, they are still very elevated compared to last year. however, six-day losing streak

for the july futures, that's the most active contract for lumber right now, andrew. back over to you >> dom, thank you for that. when we come back from the other side of this break, we'll talk to galaxy digital's mike novogratz and later senator rob rtn. getting people back to work. "squawk" returns right after this

this is hannah, she's a posh virtual receptionist at the ready 24-7 to answer your calls and assist your clients. you can't be in two places at once. let posh answer. posh virtual receptionists.

bitcoin is up we had staggering moves on a positive story on the adoption of blockchains and all kinds of

business so i don't think anything's changed in that story. listen, markets get ahead of themselves they correct this is natural in the markets we had tax day yesterday a lot of people made a lot of money in crypto and not pay tax. you also had that big surge post covid kind of finally hit the one-year mark so people went from short-term to long-term gains. i'm sure that triggered some people to sell they're going to be addressed just like every other industry addresses the esp returns. you put those three things together, caused a pretty nice selloff. >> mike -- >> go ahead. >> let's go straight to the esg concerns because i think that's actually perhaps what took the price of bitcoin down the most and raises some real questions can it be addressed? sure can it be addressed quickly? i think not. i don't know anybody who thinks

realistically that the way bitcoin is structured can somehow take up less energy unto itself, though i know their efforts were that, then the question is can you start using solar and wind and all sorts of things i know there's efforts to do that that's going to take a long time elon musk has decided that he can't buy bitcoin, how can a big institution like blackrock even think about it >> well, listen. they all buy google stock. they own youtube it's shocking like things that are worth something in electricity. you know, bitcoin and crypto ecosystem is an important part of the future of finance so it should cost somebody there's a commitment, i think, and you're going to see it louder and more clear from people in the industry to let's make this as carbon neutral as possible all electricity in 6, 7, 8 years is going to be great anyway. if you look at the cost curves,

solar, wind, geothermal. there's this gap in between when i think the world has got to figure out how do we make all industry greener. >> mike, bitcoin technology unto itself as we've talked about is about as inefficient as it comes. in fact, its inefficiency is part of the design of it in part to create the value you're talking about, but i think there's a view that if you were actually creating a new currency or new asset in this day and age and you are trying to be environmentally friendly, there are lots of other coins and other ways to do it that would be a more efficient way to do it listen, the market is going to decide why it is the most conceptualized, it is the most secure in that respect, right? it costs a lot because it's securing over $1 trillion to 2 trillion, 3 trillion, 5

trillion there are other systems, some that i think will be equally secure i don't think there will be store values though. there's something about brand. bitcoin being the first brand. you can't say let's get a new gold gold uses more electricity than bitcoin categorically. let's get rid of gold. >> elon is going to be up all night long if he ever figures out when we need 50 times the amount of lithium if we get to above 2% evs when we're mining 50 times the amount of lithium we'll see how environmentally friendly tesla is at this point that's not going to matter to him. this is about his whole deal is climate change you know, he's a very smart guy but somehow it finally occurred to him, wait a minute. my entire mantra is climate change and here i am talking about bitcoin. the light went off for you, let's get back to talking about where bitcoin is

remember when it ran up to 14 thousand and then pulled back to about 9,000. you said i've got a little bit -- i wish i sold some. you copped to that you got in trouble the stackers all rode in novogratz says paper hands now you've got to 62 now we're at 45. what are your hands feeling like are they paper how come you're not doing the same thing why don't you say, you know what, i've made ten times my money. why don't i get out and stack when it comes back down to 20? you must not think it's going back to 20. >> i think 40 should hold. i think we're going to be in the 40 to 55 range for a while we'll consolidate and have another leg up i say that not by guessing, we see institutions move in and it takes them a while ubs, goldman sachs, jpmorgan, almost every bank is on their way into the wealth channels they're not there yet. they're getting set up, getting the funds ready.

think about morgan stanley for a second 2013, '14 i was the lone wall street guy morgan stanley trained 14,000 people to sell it. they're going out to bulk wealth in america to the 80-year-olds that will have an impact. >> you would stack at 40 >> i would stack at 40. >> you would start buying them at 40. >> i would >> what's the temperature going to be when all of these financial guys are selling bitcoin? probably going to be, what do you think, 110 in the winter go ahead >> listen, i think markets aren't supposed to be easy, right? if they were easy, we'd all be rich it's interesting people are yelling at me about ethereum it's up 230% a year.

it's not normal for them to go up that fast let's not miss the big picture this is a growth industry. galaxy, we'll have 350 people by the end of the year. we were 80 by this time last year. >> mike, what's the possibility? one of the big lessons of even the last couple of weeks has been the rise of dogecoin and all of this. what's the possibility that there's another coin, a better technology somebody decides they can do it better, better than bitcoin, better than ethereum why is that not -- you know, we talk about brands. aol was once a great brand it unfortunately isn't today. >> you know what, we have invested in over 90 different projects all across the ecosystem. certainly believe there will be winners and losers our whole brand is that we're diversified. we're not just a bitcoin fund or

shop we have ethereum and we're in all kinds of places. i think bitcoin as a store of value has such a so lidified system it will remain. ethereum has the best chance of winning the global super computer when you think about it decentralized web. there are certainly competitors, we've invested in them there will be chains that connect things together but when i look at ethereum, most developers are building on them. the biggest network effect the biggest chance of winning. why is it up because of defi, three tailwinds of stabilization happening listen, we're not religious in terms of this is our coin and we're not going to invest in other coins. i've got big positionness tera luna and other ecosystems that serve a big purpose in the overall system >> mike, just to that point.

i mean, you list all the reasons that bitcoin's up and that's certainly a good list of reasons, but there's also another reason and that's speculation that people came piling into this market because they had just found out about bitcoin and about all of these different things if you look at that chart, if you look back at any chart it reminds me a little bit of maybe the japanese stock market where you saw this huge pull forward in demand. all of these people got interested in japanese stocks, they knew it was going to be there. then it bottomed out and crashed. talking about a longer term chart and didn't go anywhere for a long time. that's typical of any speculative fervor that you see market, iy stock. do ynk that we've pulled forward so much demand and gotten so many people interested in this that you could sit at levels for 2, 3, 5 years longer to come? >> i don't only because the pace of innovation is happening so fast.

if you go and look at the defi world, it's just shocking how much money is pouring in and how quick they're iterating. if i was a bank i'd be really, really worried about defi. traditional finance, how do we miss this. and so, listen, the whole world is up on speculation right now, right? people think chairman powell and other central banks for that this is certainly you would be crazy to say we're not up because of the money printing. one other reason you might see lumber come down or crypto even come down is if people really believe the economy is going to eat up so much, right? i've always said i short a whole lot of interest rates as a heej versus a portfolio and my own network. there's a lot of variables, but i would tell you on the adoption pace is growing not shrinking. i don't think we've gotten that far ahead. >> brian, before you go -- >> about half of percent of

global worth that's the total market capital of all crypto. it's about the same size as apple. when i look at all of the human capital and intelligence working on this, i have to think we should be bigger than app zbll mike, you mentioned tera luna. there are so many other different coins and new blockchain technologies that are coming out a lot of them are only available for somebody who wants to trade it on binance in the kay man island in certain cases to get on some of these networks you have to vpn into them and the like what's your thought just for users and consumers out there, folks who want to do that? is it safe how do you think of that >> consumers are in a different bucket than institutions consumers are fine to sign up for those accounts at their own

will there's regulatory concerns when you're a regulatory institution that we look at every coin and decide can we trade it or not for various reasons but, you know, i don't see the sec knocking at mr. smith's door and saying, can't believe you're buying on binance. >> mike novogratz, always great to see you appreciate it. >> thanks. >> tera luna did you -- becky, you know stella luna, right that was really sad, the way stella luna lost mother -- did you read that to your kids stella luna? >> yeah. yeah >> but this is not -- this is different, andrew? this is tera luna. >> different. >> it's a coin it's a coin. >> i cried the first time. thinking about it right now. coming up, are benefits too

generous pushing to get people back to work we're coming right back.

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we reported findings of 1,000 unemployed workers it found that almost 90% said they have not been offered a job within the last six months although most are actively looking. of those who rejected an offer, almost 2/3 said that unemployment benefits were not a reason at all.

at the same time they said they can't find workers leading the way. senator rob portman joining us it said 37% said they didn't want to take a job because it wasn't paying enough we didn't tie that to the benefits that immediately said to me even though they're offering higher wages to induce people to come back, there are still 37% of people saying it's not high enough to come back. if 37% say it's not enough money and we're up in the 15 to $20 range, higher than it's been, then people can stay at home and make more money at home. >> well, joe, that's apparently what's happening there are 8.1 million jobs opening now which is historic. we've never had that many jobs open in the united states of america. we do have a situation where a

lot of people on unemployment insurance can make more there than they can at work. roughly 22% of people are making more on unemployment insurance than on their jobs that doesn't include the tax break that the democrats put in the covid bill which is the first $10,000 was tax free if you're a truck driver making $35,000 a year you don't get that tax break but if you're on unemployment insurance you do. it's obvious if you are out in the real world there are help wanted signs everywhere people are paying big bonuses. driving into the airport yesterday morning, go by fish's big boy, offering 200 bucks. mcdonald's offering $500 a buddy who's a manufacturing is offering 60 positions in ohio. 30 in ohio she can hire people in ohio. by the way, about 15 states have

already stepped forward and said we're going to have to end this $300 federal supplement which as you know is extraordinary. we haven't done that before. we did it in the last great recession but we did it to the tune of 25 bucks a week not 600 bucks a week it's important to get people back to work. >> senator, if you don't want to blame that government program, you can blame not having the schools reopening. >> that is one of the issues. >> well, there are some people who are saying in the survey this tilts towards women more. you look at the numbers in terms of men they say i can't afford child

care the covid issue is finally getting behind us. this is an opportunity to get back to school, back to work, back to a more normal life >> and then just safety concerns obviously. going back to a physical place to work. that's all part of it. >> well, there's some of that, too. this $300 continues until labor day. it continues into september and, look, the economy is red hot the jobs are out there obviously. people are desperate for workers. there are companies in ohio that are shutting down. those jobs are being lost because they don't have any workers so it's -- in the real world, this is a big problem >> you were always there

watching it play out this week republicans don't seem to know who they are right now, whether they're deplorables, whether they're classic conservatives. is it a big tent do you need everybody? >> it's got to be a big tent politics is about addition, not about subtraction. it's about adding more people. joe, i think the republican party is doing pretty well right now because of president biden and the progressive democrats who are taking the country to the left that to the left is not where most people are. you look at 9the incredibly hig spending rates and you look at some of the things they're talking about, state hood for puerto rico, d.c.,i packing the

supreme court. it gives the republican party the ability to reframe our policy agenda, which is ultimately what makes a party strong >> okay. >> deals in our policies are what we need. >> senator, thank you. appreciate it. good to see you, frishes. >> joe, we've got the raging inflation. we've got the ufos and the cicadas. this is my first cicada

good morning, here we go retailers report we'll bring you the numbers and the stock reaction. warner media discovery deal is one of the biggest media mergers in a long time how did it happen? this hour we'll ask not one but two directors of at&t. and the new big short. this one against tesla a name you'll remember from the subprime mortgage crisis betting big against elon musk's ev empire we'll bring you the details and what it could mean for your portfolio as the final hour of

"squawk box" begins right now. good morning and welcome back to "squawk box" here on cnbc tuesday. it's 8:00. that's good. i'm joe kernen along with becky quick and andrew ross sorkin we're making progress but we have a lot left for the week >> we have a lot left this morning, biggests. >> we do a lot of really good stuff left. a couple of at&t board members it seems people as they started considering that deal, most stocks sold off significantly

into the close even some competitors down -- not indicated, they're trading. futures are indicated. 1.64% this morning we've got a trio a lot of retailers coming out of this week. walmart, the biggie beating first quarter analyst estimates on the top and bottom lines. guidance u.s. comp store sales 6% that was much better than what analysts had forecast though net u.s. ecommerce sales came back down to earth a bit. 37% growth on that metric. it was the slowest in a little more than a year second dow component out, home depot beat analyst estimates on the top and bottom line. same store sales rose more than expected 31%. home depot, what has it got to do up $7 now. >> people looking at it.

>> macy's, much higher in the pre-market company posting adjusted earnings of 39% in the first quarter compared to an expected loss of 41 cents a share macy's earnings per share boosted by some real estate related gains. meanwhile, same store sales surged more than 60% and the company raised the full year forecast don't miss macy's ceo jeff gennette on "the exchange" at 1 p.m. the ground breaking show with kelly. at&t's megadeal to combine warner media with discovery is an about face from the $85 million purchase of time warner. at&t ceo john stankey said this allows them to focus on 5g, broadband and meeting with connectivity joining us is at&t board member,

glen hutchins. glen, i know you don't speak for the company on these things, but you are a long-term watcher of this you are a long-term thinker of these things the criticism has been incredibly harsh with this about face do you think there was a problem with the thought process for all of this, with the strategy, with the execution on these things, how the market changed just looking at where we've come over the last four or five years. >> good morning, becky everyone nice to see you. becky, i think, first of all, i think one of the things that was missed in yesterday's reporting is that thetime warner transaction was undispute bring financially a good transaction for at&t it was a debt plus equity with roughly $100 billion yesterday's transaction was $43 billion of debt reduction. and 56 to $57 billion of equity value in discovery based on the

close of price of discovery is about the same $100 billion. that doesn't include the net cash flow that at&t received during its ownership, which valued synergies, multiple rerating as a consequence of getting a median multiple, telecon multiple and the option value with 71% of the up side being shared by our shareholder. the first important thing that needs to be out there so people understand, financially at&t at this point has made money on the transaction. that's big point number one. i think the other thing i would say is that the value -- this is because the value of the company was enhanced by at&t's ownership both turning three companies into one time warner has been a holding company creating hbo max which was enormously successful.

building a technology platform across the entire company and leading industry transition to theatrical these are all things time warner had to accomplish of the combined company so where we stand right now post the antitrust battle and most importantly debacle associated with the pandemic, what's the best way to extract value from these -- from these assets i think having the two, john stankey and david zaslav said, these are my independent personal opinions, those are zaslav's and stankey's, the arguments that they make and having discovery with all of its assets and synergies and leadership and pure play at&t are at this stage the best way

to extract value from the shareholders for these assets. >> that's been a question that's been asked repeatedly, glen. is it a situation where you can't have the pipes matched up with the content company, it doesn't make a lot of sense. there aren't many examples where that sticks. you can point to comcast, our parent company, but aside from that even verizon unwound the smaller purchases it made of aol and yahoo! very recently, too. is it just too complicated to have content and pipes together? >> well, you know, the complication one heard about becky was not the management of the company but the capacity of the stock market analysts and buyers to value a combined company like that. the combined media analysts and tech -- telecom analysts couldn't value it. i think inside the company it wasn't as complex as it seemed

from the outside and in particular the synergies associated with the new streaming business of the at&t distribution platform, which was powerful, and the high value of at&t of the customers who bought the wireless products simultaneously were very powerful synergies now that those have been accomplished, i think they can continue -- they can persist in this new format. they probably weren't available as they are today in independent companies to begin with, but i think now they can be. sorry, was that joe? >> yeah, tvs >> hey, joe, how are you, my friend. >> i'm good, my friend it was pointed out by john and others that it took 20 months of anti-trust like -- all kinds of back flips to get this done. 20 months that delayed

>> see, we told you it wasn't a good merger. now you're just realizing it if it was so advantageous to these two companies so that you needed antitrust scrutiny, if it was going to give them such an edge, they told you it wasn't going to work. is that what the antitrust officials did. they tell you it's strategically good it will give you an advantage. i think some of the blame does lie with the justice department. >> the answer is embedded into it. >> i never understood the rationale for the antitrust. apparently the judge didn't

either andrew >> i have to say, i look at this differently than did you and i apologize because -- >> no apologies. >> we know and like each other as much as we do here's how i see it. i look at the three major transactions that at&t pursued over the past decade all as remarkably trouble i look at the efforts to buy t mobile which might have been a very smart idea but the way it was structured if you remember when the government effectively blocked it, it handed $3 billion back to t mobile and spectrum which i would argue created the modern day competitor effectively to what's happened in the industry. then i look at the directv deal which i think demonstrably no matter how you look at it has cost shareholders tens of billions of dollars. i don't see a different way. then i look at the time warner deal as a bit of an effort to fix the directv deal and maybe we could call it a push.

>> that won't change a whole lot in this world. i think -- it's very clear to

me, by the way the only thing i would dispute it's very clear to me that the time warner transaction from a financial perspective, and from a strategic perspective, at&t is extracting a huge amount of value and it has a format with a lot of synergy financing it, that part is wrong. i think that's demonstrably wrong. but i think where we sit today and we have our obligation to maximize the value they have the capacity to take advantage of the synergies that previously were only available byning more on the inside of at&t. and then have them present the marketplace something they find less complicated and which value can be maximized by shareholders and a telecom multiple and

having, by the way, john stankey emphasized this, it's not to be lost in this, we now have in front of this at&t two very high return businesses and the 5g and the broadband buildout that is a very good commercial proposition. he will have a clear path, cash flows and balance sheet to invest in that it's very clear the shareholder value maximizing exercise. >> hey, glen that may be the case i'll ask you this question and we can move on i know we have other issues to talk about it may be the case that it maximizes shareholder value from your opinion what is the street missing you look at that stock it's down another 5.4% this morning. before the open both at&t and discovery shares were higher >> so, you know, day-to-day, i'm a long-term investor, becky. day-to-day fluctuations in stock prices are not instructive,

particularly right in the wake of transactions when there's a whole lot of selling and buying stocks and hedging positions and moving portfolios around i think we need to wait for a while to see how this settles out. second of all, a lot of the issues that i talked about are with the value of synergies and the up side in these two companies will take some time. remember, even though john stankey said the regulatory process is straightforward, it will take time and so this is not -- this is a transaction that will close in some -- i guess they said about a year from now so there's a fair amount of time to understand all of this before the stock market reaction will be clear and clearly understood. >> how much it's going to be

transitory like the fed thinks and how much of this is really going to stick as somebody who's on the new york fed board who watches this for a long time, what do you think? >> look, i think i'm less worried about inflation than most people are and i'm more in line with kind of conclusion that the fed has that doesn't mean i'm not worried about it doesn't mean there's not some probability of it. i'm saying there is a lower probability. one is it is not recurring it's a one-time thing so that should not change expectations you can see that spending together with the restart of the economy moving through the economy in one year. but when all of that gets behind us it doesn't get into recurring revenue, recurring taxes the way other 10-year type actions do. it shouldn't change expectations the infrastructure proposal proposed by the biden

administration has one actually i would call conservative element which is that the proposal be paid for with higher taxes. higher taxes are controversial but the outcome of that from an inflation perspective is as many pluses and minuses if you pay what you pay for spending, that's not inflationary the fed has robust tools to combat inflation even if the fed tries to stay easing for too long, they know what to do jay powell has a lot of tools. over the years, becky, what i think is a massive historical transition from the industrial economy to an information economy. that combined with global trade and global savings strike me that there's a massive, massive growth historical trend pushing inflation down so i'm just less worried about any sustained inflation.

do expect to see some dislocations reflected in the prices in the next year as the economy gets restarted >> glenn, we're playing this out. i have 50 more questions for you. come back soon i really appreciate it >> where are my pancakes >> what's that >> i missed the squawk stack where are the pancakes >> we'll have to put that together for you tomorrow morning. we haven't talked to you about bitcoin, nfts and a bunch of other things we want to dig in on thank you for your becky glenn is always a good sport to be as candid as he is and come on and talk about these important issues. we have another important voice on this week's big warner media discovery. jeff yang is going to join us. he is the co-founder of redpoint ventures and a board member of

at&t those stories and so much a on the way. "squawk" returns after this. the pursuit is on. the pursuit of outperformance at pgim. with deep expertise to outthink across multiple asset classes, actively managing investments in the world's public and private markets.

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>> trying the high performance in the next introducing a hybrid by 23. it will be on sale for 24. lamborghini had the best quarterly sales ever the demand is out there especially for the lamborghini suv. they posted record profits in 2020 they see the way the market is going. look at what's going to be happening with humvee sales through the end of the decade and it just accelerates from here on a global basis and lamborghini has to make this transition remember, the parent company of lamborghini is volkswagen.

herbert dees, he's pushing all of the brands to move into the electric vehicle market. that will now include lamborghini, andrew. we should see a full electric lamborghini by the end of the decade back to you. >> phil, let's talk about tesla though a big bet against the electric car maker by michael burry, which is fascinating famed investor worth more than half a million he was portrayed by actor christian bail in "the big short. he held bearish put options on more than 800,000 shares of tesla, as of the end of the quarter tesla dropped 2% down close to 20%. joining us is gene munster, loup ventures founder and managing partner it has been very difficult to short tesla over the years unless you do it for a very short period of time and you catch the right window, gene

>> the future, i think phil summed it up so well when lamborghini talked about a total ev a decade out. that's the dicey part of this short call ultimately is when you're shorting a theme, i made many incorrect call a mistake as i made as an analyst was making a recommendation based on valuation. when there was a secular theme phil's comments about the growth in evs is quite spectacular and the simple reason i've put that as an undeniable truth so when i think about investors betting against tesla for the long term, that's ultimately the question is probably somewhere around market share and ultimately what their market share, will they be successful in the economy i think a risky bet to go against this company long term

i just want to say one more thing, andrew. the near term, the stock is still up a lot over the past year $16 $160 12 months ago it's not hit a bottom but for the fundamental short fall it is headwind. >> let's say you want to own this company or not and we had this conversation five years from now, five years let's give it a full on five years. what do you think the price of this stock is? what do you think our market share is what does the ev world look like what does the vehicle world look like five years from now >> so the share goes from about 80%, 70% in the u.s. to date, 30, 20% asia i think globally effectively market share for evs will be car market shares. in answer to your question, i think it's going to gravitate around 20% if you look at big automotive

makers, volkswagen, that's around 15% they will have an out sized market share what they could ultimately be worth if you get to the 20% mark and in five years they're going to be thinking about 6, 7 years out you can get to a case where this can be a much bigger company, $2 trillion plus company based on this is the real substance of the bulk case is a business model more like a traditional tech model we've talked a lot about this. that's the substance of the valuation case is that if they are successful at hardware, software services similar to apple, look at what apple trades at a 6 revenue multiple, you can build a case i think ultimately there's a question around competition but i think that there is a strong case for long-term investors will be rewarded near term again all bets are off >> in the near term, speak to the issue of these tax credits

they're credits that they're selling environmental credits effectively and what happens to that because that is part of the burry thesis >> well, in my view it should be part of the -- excuse me, the bull thesis and the reason is i don't think we're at anything close to ending these tax credits. they were ended. they will likely get restarted again for tesla owners it will be about a $7,000 tax credit call it on average a 12% discount to a tesla. that's a big deal that they've been putting up the kind of numbers that they have, accelerating growth off of higher numbers despite any consumer that is keeping tabs on what the biden administration is saying could expect these tax credits. so, yes, i understand that sales have been great. i think the tax cuts will be a continued boost over the next year plus.

i think they're going to ultimately continue. i think the government is going to continue to subsidize this. >> fair enough gene, thank you. appreciate it. >> thank you, andrew >> you bet becky? >> rick santelli is standing by at the cme in chicago. he has breaking economic data. we've been waiting on the housing numbers. rick, take it away. >> we are waiting for april housing numbers. they seem to be a bit delayed. do keep in mind that housing is so many issues that we all need to try to pay attention to, whether it's just the basics of supply and demand, not enough houses especially single family units. a lot of shifting from urban to more single family from less multi to more single. >> down 9.5% at 1,569,000. that is a huge miss on starts. we were looking for a number close to 1.7 million

that is the lightest we have avenue seen on starts since february when it was 1.4 do remember 1.7 p 39 in rear-view mirror that number was the best number going all the way back to 2006 permits, a different story up .3. 1,760,000. these are seasonally adjusted annualized units very close to expectations in the rear-view mirror, subtle revision from 1.766 to 1.759 if we look at 1.760 on permits, high water mark post covid was 1,887,000. that was the first month that was the best going all the way back also to 2006. we see interest rates have been slightly elevated. hovering 10 basis points at 1.74 lumber prices have come down a bit. tech styles, crude oil, energy

markets which figure in not only to all the various plastics in house and insulation copper in terms of commodity prices, but many do believe that the spike in some of those materials may ease back a bit as we get it more into the summer months of course, becky, i'm sure diane is going to have more specifically with respect to what the future may look like on the permit side. >> yeah. let's hope that those commodity prices come back down because to the moon you talk about something that's been on a run especially with lumber and copper and things let's get some instant reaction from steve liesman and diana olick. let's start with you >> reporter: this is a huge miss as rick said i want to break it down into single family versus multi-family we have this huge shortage of single family homes. that's where we're seeing the real pain here single family permits down 3.8% month to month single family starts down 13%.

a lot of it has to do with these material costs and pressures and supply chain tha've been talking about. the national association of home builders said yesterday that a lot of builders are delaying their starts because of higher prices and because of these issues they also said in a recent survey that 15% of home builders are laying the concrete and then not framing the house. that counts as a start but you don't get a house out of it. so, again, we're seeing those issues with lumber we know that this house that's a renovation stopped construction all together because they can't get the lumber right now we're seeing much higher prices. lumber coming down slightly but still way up compared to a year ago. one note on this, i do want to throw out any of the year-over-year comparisons because you're going to see permits up 70%, up 59% on starts from a year ago. that's because the housing market completely ground to a halt in april of last year so i would just make a caution on that note multi-family is up slightly but, again, it's really single family

where we need to see this construction and we're just not getting it because of these very high commodity prices and of course the supply chain and the labor issues that's another huge problem for the builders right now they want to increase production they do not have the workers to do it. i think that's, again, part of why we're seeing this disappointment in the starts and permits numbers. back to you guys >> steve, good luck expanding on what rick and diana just said unless you can tell me when all of these problems end. >> you know, it's really interesting, i was looking last week at the forward curve for lumber and it does -- it is in what's called backwardation. lumber prices in the future are lower than where they are now. what's happening right now is very interesting in the sense that diana's saying they're waiting until they believe that lumber prices will fall, at least some of the lumber among other commodity prices at least that's the way the market's priced. everybody keeps delaying, that guarantees demand down the road.

becky, i'm interested in the macro on this. maybe we can engage diana. i'm starting to think -- not starting to think, people's move out to the suburbs the three most stressful things do you in your life, there's death, changing jobs, divorce is the fourth one and then moving your house, right? so people are doing this on a temporary basis. when we have the discussion which we've had over weeks and months on "squawk box" about what remains from the pandemic and what is temporary, this move to the suburbs is not a temporary thing. people are moving out and they're not going to move back and so what's engendered in that i think when you move to a new house you remodel over time. so that's like an annuity for home depot and for lowe's. what about when you move to a new house in the suburbs you need a car that's engendered in the car prices timely, what about the technology are people moving to the suburbs with the idea that they don't

have to go into the office when we watch the housing numbers it's part of a big and broader trend that i don't think goes away immediately and creates a whole new investing dynamic for our viewers. >> reporter: yeah, steve, i would just say as much as i hate to agree with you, you know that, i agree with you what we see are people moving to the suburbs to the places where they are but they're moving to smaller cities we're seeing huge growth in cities like memphis, tulsa we just did a story of how smaller cities are paying people to move there if they can work there remotely that's juicing the housing markets in areas we wouldn't have expected. in turn, because they're seeing shortages in places like tulsa is going to prompt more home building in areas like that as well when you look down the road, there's going to be even more demand something really interesting the builders told us is that almost half of builders now are putting esca escalation clauses in the sales of their home because they expect prices to go higher

we've never seen that before you don't generally see that on a new house that you might have to pay even more than you agreed to because the prices are going up. >> yeah. guess what, i bet they're not putting de-escalation costs -- clauses flat contract so if prices come down you get some of that capture, too. steve, to your point on that, just lower prices for commodities. last week was the first time in eight weeks that lumber prices have actually dropped. it was the first time in -- >> right. >> -- six weeks that copper prices have come down. there could be something to these prices coming down, especially that kicker from diana about these new clauses going into the contracts that usually happens right around the top >> becky, let me just follow up on what diana was saying something that she knows and not everybody else knows she'll know it like the back of her hand housing starts in the south versus the rest of the country the south is all housing starts in the south are greater than the northeast, the midwest and the west combined. what we saw today was a 9%

decline in housing starts in the south and that's because -- and that's really what drove the number lower that really speaks to the demand that's going on in these southern cities that diana was just talking about >> yeah. you're seeing increase in accounts home building is always strongest in the south, always strongest in the south and west. that's where there's more construction, land, where builders are more active when you see a drop, that's a warning sign >> you know, there's another issue in the cities and countries of course, not only covid issues, but safety, security issues. we had a rough summer with regard to some of the rioting going on don't dismiss that as a motivation to avoid big cities >> guys, thank you >> yeah, but, rick, the smart financial play here -- the smart financial play free rents they're offering in the cities now, rick. >> yeah. >> there you go. >> a lot of rents in chicago and

there's not a lot of takers. >> bye-bye see you guys later andrew >> when we come back, we've got at&t board member geoff yang stay tuned for that conversation right after this the big presentation. or the day where everything goes right. or the one where nothing does. with comcast business you get the network that can deliver gig speeds to the most businesses and advanced cybersecurity to protect every device on it— all backed by a dedicated team, 24/7. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities. woo! you are busy... working, parenting, problem solving. at new chapter vitamins we've been busy too... innovating, sourcing organic ingredients, testing them and fermenting. fermenting? yeah like kombucha or yogurt.

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coming up, a special interview with vc veteran geoff yang plus, he's an at&t board member.

we'll get him to weigh in on the potentially game changing warner media discovery deal stay tuned, "squawk box" coming right back everyone wakes up every morning to a world that must keep turning. the world can't stop, so neither can we. because the things we make,

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24 hours since we got the word that at&t would combine its warner media unit with discovery. here are some of the brands the new company will have under its roof look at all of this. impressive for discovery

now our next guest says amusement is beginning to stop or it's slower than the musical chair game joining us is geoffrey yang. redpoint ventures co-founder and at&t board member. good guy to have on. good guy in general. good guy to have on and talk about all of these things. i couldn't believe it. someone said comcast, i guess, would have been attracted to look at these assets maybe comcast now goes after discovery some day there's bohemouths left when it's all said and done what's your thought when the music stops, there may not be many left at this point, geoff. >> good to see you thank a lot for having me on today. you know, i guess my point of view is it's a little bit like musical chairs a but much of people circling

around it looks like there's going to be three people of real scale both in terms of subscribers as well as content. that's netflix, disney, hbo max. i think the new warner media discovery combined has a library and subscribers permanently in a cemented position there. then you have a couple others with large groups of subscribers with amazon and apple. so you have to believe they're going to be there. at some point you ask yourself from a consumer standpoint, when do you breathe subscription exhaust and how many do you need they're not fundable content is not fundable. consumers want more than one, two, three, four at some point they're not going to have seven or eight or nine kind of relationships. we've been in this period where the music's going.

they're six or seven chairs around and now all of a sudden the music is stopping and some of the other people like warner media and discovery combining to have a formidable player now you'll see other transactions happening to try to get those remaining seats. >> so, geoff, you were talking about the action in both stocks and what we saw yesterday. after we talk about at&t we can talk about what happened with discovery as well. that ended significantly lower than where it started the day. at&t initially was up about as high -- almost got to $34. when it was all said and done it was down quite a bit and now it's down another 6% today. this cannot be what the company was looking for. one of the reasons that's being bandied about.

not only disappointment but really some chagrin at the way the dividend cut was telegraphed and how it was communicated to the stream some people said you had to get an f to not only go into the release. it wasn't on the cover page. it wasn't outlined exactly what was happening. you had to be, like i say, you had to look at it, say it's going to be -- it says it's going to be resized. if they had been paying 40 to 45% of 20 billion, now they say they're going to be paying this. you had to do back flips to get to where it was and the company knew full well that a lot of people owned it for that dividend, that was going to be a key thing. that has to do with people think they were almost duped or that the company tried to hide it it's unhidable that it was going to happen. >> well, you know, i'm not a trader just looking at what the best -- is in the best interests of the

long-term shareholders for both discovery and at&t, i think this deal makes a lot of strategic and financial sense. it was clearly a tough take but like i said, i'm not a trader. i just look kind of long term. i think the resizing of the dividend makes a sense and still leaves it within a top 95th percentile of all companies with dividends and is more flexibility for allocation of capital to grow the business and its core strengths and broadband and business and wireless. and i think it also makes sense for the discovery shareholders and the new discovery will have more freedom and capital allocation i look at it over the long-term and think it will will be a good transaction over the long-term. >> i don't know if you were

listening to the conversation we had with glenn earlier and he made the case the rationale to bye warnermedia or time warner then was ultimately a benefit to at&t shareholders i think there are still questions about that in terms of valuation. maybe it is a push maybe it will turn out to be much more than a push. but i would ask in a different way. which is to say how do you think about the opportunity cost, in the last three years theres been enormous attention at at&t spent on restructurings and integrations and fixing of this asset. and how you think about that, relative to, and look it is a counterfactual we will never know, had the management team been able to spend and devote that time on the core business of telecommunications and whether that would have been a better use. >> well, i mean i -- i think glen kind of overviewed some of math and i'll receipt others do that.

but from our take it was a good financial transaction but we're not just in the business of creating financial transactions when the business serves in customers. i think from a customer standpoint, you know, getting access to some of the best premium content out there is a big plus and big effect on customer attention in turn and i think customers got a lot of benefit on that. >> in terms of access to content, i think what we've seen over the last several years is, you know, verizon effectively or disney rented verizon's lines. we saw netflix do a deal with t-mobile all those things the customer experience, they got access to these things in a very similar way without those companies having to actually buy the entirety of the business and then get involved in all the restructuring and integrations and all the things we just talked about >> well, you know, i still

believe in the fundamental premise that we had when we went into the transaction in terms of owning proprietary contenting, being able to change content viewing experiences, but the landscape also changes there was a lot of time that was held up through getting through the department of justice on the anti-trust action. there was a lot of things changed in terms of needs for capital for the core communications business including wireless 5g options and including opportunities and investing in broadband and business and small and medium-sized business. so, you know, i think all of those, you know, conditions change and we think this is the right thing to do from this point going forward. >> jeff, we might return to this but as the day went on and discovery traded sharply higher

too, it is an impressive collection of assets but i guess when you look at it, a lot of it is not streaming is that part of what sunk into people, wow we're doubling down on a lot of old media as well what do you think happened with discovery shares yesterday as they kind of end up lower on the session? >>you know, like i said, i'm not on the trading desk, so i can't really tell you. but i think part of the rationale of this as well was putting together a little more heft on the linear side. so the combined discovery warnermedia is going to have to be a must have bundle. and there is the transition between the existing linear and into streaming so the combination of the rights, the b content library, the existing linear business but also creating content rights that will really fuel the streaming business we think will have, you know, pay great dividends as you look

forward to, you know, who is going to be this successful winners and successful companies in the streaming business. >> okay. jeff, thank you. thanks for agreeing to come on today. it's always good to see you. thanks. >> nice to see you thanks for having me. >> okay. you're welcome take care. we're going to continue this as we get to cnbc head waters request jim cramer we've watched the stocks of at&t and discovery. and speculation that amazon may buy m dpm and comcast the past 24 hours what is your take. >> these at&t people say that i'm not a trader i find that so -- what an ill advised strategy to come on our network and say that after pretty much having a ceo come on not that long ago and stand by the dividend tell us how would he, how is the dividend safe?

what's going to happen stock's going to goup and dividend will go down. yield will go down no. they cut the dividend and way they kid is completely suboptimal and the people selling rate the long-term holders who feel very betrayed and look i know they have to stay stuff it is corporate america. i expected better. these people are pretty legit. they could say look, we screwed up paid down too much get got very excited -- off load something really didn't fit even though we said it fit and the -- you know, the -- 6 logic wasn't lockiced all you know, they say this stuff and we sit there and i guys fight the good fight and they come right back and say oh aim another not on the trading desk. this is owned by grandmothers. what an insult to their shareholders it is just an insult

i'm sure they will say well cramer just a jockke where's the shame? they screwed up? why don't you say we screwed up? why don't you say we paid too much why don't you say the dividend was safe and we were wrong how about they say sorry how about sorry. how about randall stephenson made a ton of money and he got out and ebb we're against everything he said but theyan't the it's corporate america. >> never one to hold back. we'll see you in a couple of minutes. appreciate your perspective on 'lseevybt. wel e erody tomorrow "squawk on the street" is coming up after this quick break.

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welcome to "squawk on the street." i'm carl quintanilla can jim cramer and david faber futures are steady as attention turns to retail blow out earnings from walmart, home depot and macy'ss with raised guidance. details on the discovery warnermedia merger walmart, home depot, macy's al