good wednesday morning welcome to "squawk on the street," i'm carl quintanilla, jim cramer, david faber at the new york stock exchange. futures remain range-bound as we await tomorrow, and in the meantime, meme stocks will get more action, the president goes to europe for the first overseas trip 10-year below 1.5 for the first time since may 7th the road map begins with the rise of a new crop of reddit fueled names clover, wendy's and others joining the ranks. and merck's set to supply the u.s. with an oral covid-19 treatment, an antiviral treatment, to treat mild to moderate patients and carl, we

have been talking about it for some time now. >> and the biden white house looking at the leak of tax information. >> is it a function wof the fac that we have no earnings and we're bored and that's why the meme stuff is going on >> and no pictures and it will get hotter we have gamestop reporting tonight. gamestop is the mac daddy of this. >> the annual meeting. >> they have the shooting match. every. maybe we hear something, maybe we don't, but i did some research this morning on wendy's and i spoke to nelson peltz, the largest shareholder, and chairman, very happy with the stock and felt after the previous quarter the stock shouldn't shoo have been where it is, obviously not a seller and thinks that the breakfast is

a great success which it has been i had todd on, the ceo, and we were both, saying that the stock was unbelieve al at, unbelievable at 22.5 but we were getting interest, last night, i quoted, saying it should be going up a very highly paid, i think, wall street broker, analyst, and saying that the salad is fabulous. >> got it. >> so i'm going to go and get the salad this weekend and see if i buy the stock. >> stifel to your larger point downgrades and they almost fall over themselves saying look, this is not about concerns about the fundamental, we just talked to the company at a conference, but 25 was the 12-month target and we got to step aside. >> i guess gamestop a lot of people had a $20 target. >> and a $10 target. >> some people had a zero target. >> amc, $7 target. >> i can tell you the new burger is selling well, the jalapeno popper, i had that last weekend

is killer and there has been a major resurgence in breakfast. they're passing burger king by the way. >> and talk about the fundamentals who enthat move the other day has absolutely nothing to do about it. >> on the wall street bets side, i saw a lot of people say it was the wendy's tendies. now because you're a boomer, i have to explain that it is a game. >> and i heard so many good things. >> professor. >> baby boomer >> professor. >> i don't want to be facetious mere there that there was no other story to wendy's other than nelson agreed to the meme. >> soaring again after the incredible move yesterday with clover, and once a chamath spac that merged into, or clover merged into, it and i believe he's still locked up, and there is some reporting, his stake as you might imagine, has risen

dramatically in value, but it's a six-month lockup from the close of the transaction, and that was in january, so there has been some reporting that he can sell i don't believe that's correct at least if you read the s-1 but as we take a look at him but you know, if you also, if the stock manages to stay above 12 for a period of 20-some days, you can sell a third of the stake. they will be watching that, too. typical language in all of the spacs and the point of course, he has become, his wealth has gone up dramatically even in the last day with this move in clover which continues, and that is heavily shorted but other names, too, if you've taken a look at wish remember this thing, remember these guys >> yes. >> they have gone public the ipo. didn't do well they sell a lot of stuff you'd buy at, i don't know, where would you buy it dollar store, maybe? >> you skeptic, you. >> by the way, clover was downgraded to neutral after bank

of america, with the numbers and hindenburg, that had been a failed deal. >> that one, which is heavily shorted, 50% there is some method to the madness, jim, in terms of stocks >> and hindenburg did a good job why you shouldn't own it >> we're talking - >> goldman takes a crack at the meme activity today. kostens, they look at various episodes and they argue that it is small lot trading that declines prior to the share price peak, and that in their view implies that it's larger traders who are driving us to the peak, and then again, after the peak >> wow >> well, i was hoping we talk about the out of the money call problem, where people buy out of money calls, it's very hard, if you're a market mover, it is very hard to - >> in gamestop, hundreds.

>> they've gone up dramatically. >> you have to cover if you're a market maker it is very hard to - >> people are selling the calls. that's one way that you're - >> right >> a dividend on gamestop? >> well, these people by the way, have total contempt, take it from me, and i think that's because i'm actually trying to figure them out, and like wendy's, why did i call nelson peltz, because i happen to like wendy's, i thought the stock should go higher and i wasn't focused on the garden salad, i was focused on same store sales. and that little comment i made, they hate that. >> i know. >> they hate that. and i'm philly, i never threw batteries but snow balls >> my father was hit with an eagles playoff game, buddy ryan,

we did not go for five years, but he was hit in the head with a beer bottle. my father passed away. my mother died in 1985, why don't you give her a jingle and see what she has to say. they've got everything. >> they got it all. >> they can go after my mother >> i think you got to keep doing what you are doing and don't let them get in your head. >> i'm convinced if you explain to people what moved this in part, because people are saying wendy's tendies, and wendy's has a great social media site. listen to me. >> i'm listening the question i have is who is behind the trading is there something we don't fully know is it not just here in this country? is it a global phenomenon? is it traders in the other country. >> is it the colonial pipeline

people >> i don't know can you tell me how i can earn 8% interest in the cash account how do i get 8.5%. >> isn't that higher than what i'm getting at jp morgan >> i don't understand that and you keep saying you get that on your holdings. >> i got 8.6% on my cash, do you think they're taking some risk are they lending >> bitcoin or ethereum or what >> that's my cash position, getting 8.6% now that's not possible. >> no. >> without taking on a level of risk >> yes >> but people want - >> i would take the money out if i were you. >> also this new thing, carl, would he have things like this hospitality, where the stock goes higher, because of memes, you then get preferred, that it can convert and it is called a virtuous circle up, we should be following these things, because people look like aht under us, and how did that go up from three to seven, the answer is virtuous circle. >> yes

>> hospitality h 2. watch out. >> and wendy's announcing a re-fi operation today. not that it is related but it provides more opportunity as you say >> the senate has passed this $250 billion tech and manufacturing bill aimed at countering china the bipartisan vote, 68-32 yes, still possible. the legislation called the u.s. innovation and competition act it includes funding for domestic semiconductor manufacturing, and securing supply chains, all kinds of statements, last night from the venture capital association and the semiconductor manufacturers, about how this is a good thing. >> not everyone agrees sometimes, by the way, it is about 49 hours straight, but eunice had a report this morning, on the exchange, where she said that the chinese are furious about this they just cannot believe that we're trying to be competitive what what's wrong they can't they think -

>> it was -- >> listen to her now, they're blacking us out right now when we do this. but they don't like this they think that they've been fair why are we targeting them? of course i had bobby codik on last night, 30 years running activision blizzard. >> still a board member of coke, i believe. >> you befrpa. almost as many games being played as there are countries, you know, coca-cola is everywhere but we're talking about competitiveness and how we can't be competitive with more things like this. and that's what the chinese are against. our attempts to become competitive. and if we got secretary raimondo on here, unbelievable from the commerce department, remember the commerce department used to issue facts like every other week, gina raimondo is trying to change this but the chinese are worried that we're doing this. >> we're launching trade stalks with taiwan. and the wuhan lab story

continues to bubble and the president going to the eu, more discussion that they are looking to remove the aluminum and steel tariffs by next week this draft document, maybe ending this boeing airbus saga once and for all. >> that would be good. although devastating report we have, and i don't know if you caught that this morning. >> i saw some of it. not all of it. with phil lebeau how the manufacturing snafus at boeing are just terrible and when you listen to it, you don't feel very proud. boeing is a great american company that is really stumbling. and that's what the guest said, and i have to tell you, my trust owns it, but when you listen, phil is the best, and udar has been on "mad money" and pulls no pun. s and basically saying that we can't make them like we used to. and it was very, i mean my father always told me about, always zero, always zeros above him, and then suddenly there was

a silver plane, a b-29, and he knew we were going to win the war after what happened. and that's not the boeing we're seeing now devastating. >> he's the dean, too, of aviation, in so many ways. >> we will take a break here when we come back, the irs is investigating the release of wealthy american's tax information in the wake of the blockbuster report from pro pu publica. >> we will talk about why the 10-year is blow 1.5 d anso much talk about what cpi could hand us tomorrow. don't go away. hey, you wanna get out of here? we've got you. during expedia travel week, save 20% or more on thousands of hotels. just book now through june 12th to plan your escape with expedia.

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the internal revenue service says it is investigating the release of wealthy americans tax information, this after pro publica published a report saying it obtained irs information showing how multibillionaires like jeff bezos, elon musk, warren buffett, michael bloomberg pay very little income taxes, in some cases, actually nothing and i know we talked about this yesterday. this is sort of part two of the story. part one of course is the numbers themselves as you said, jim, you know, rick santelli had a question for me, i think and you made the point, it's avoidance, it's not evasion, avoidance is what you want to do the question is, is there anything that can be done to capture some of this incredibly increasing wealth so that there's at least a sense of fairness amongst those who would argue that it's not fair.

>> well, jessy izer's old friend, on "squawk on the street." an unbelievable interview. >> started at the -- at "squawk." >> and senator warren coming up, we have to have a surtax a surtax, and in the vietnam war, lyndon johnson came up with a phone tax, out of into where, they charged you a phone tax, in order to pay for the war i would say if i were running for whatever, that is it's time to have a surtax on billionaires not 5% of their assets, that's wrong, but if you pay nothing and you're a billionaire, there is a little box, like the $4,000 claim for children there should be a box.

there has to be a surtax on billionaires it's the way to do it. billionaires are going to hate me now, too, along with the meme people. >> you're making friends all over. >> more people i don't care about. >> a surtax on what? are you trying to judge their wealth i mean i don't - >> a surtax on whatever gains that they have had that year >> the thing is, they're not booking any gains. >> well, no. >> they're borrowing billions to get the stock position - >> but they can -- >> and the issue i think is tax deductible. >> okay, well, that's, look, avoidance first of all, is everybody's right and as a matter of fact the code says you should shoe try to avoid it >> i know. >> a w-2 employee. i'm sure i would try to avoid to. >> and we all know these people as billionaires so i think that the tax code should be changed to say listen, if you are a billionaire, we are going to take a surtax on whatever way you try to get income to you oh, come on, david i'm trying to --

>> i think it is all a discussion headed in an interesting direction. the times suggests, that the income tax is public the way property taxes are the argument is the unrealized gains can be counted as income if you're operating outside the tax system here's what sessy said. >> the ultra wealthy are completely outside the system and their wealth in all of the power and all of the means that their wealth confers is completely, almost entirely, outside of the system. and the question is, whether that system is working >> right >> as for the disclosure, andrew asked him if this was information he thought that the public should know he said i think it's in the public interest to know that the world's wealthiest person paid no income tax. >> i think that was great reporting. and if that is the subject of the investigation, that's how he

got it. >> and was it hacked somehow the ichltd irs hacked and then provided to them or the irs hacked directly? there are significant penalties. and more reporting to come they have an enormous amount of data so there will be more stories. >> shouldn't there be outrage? i think there are a lot of people who don't make a lot of money in this country. >> we've been sitting at this desk discussing the tax system for years amongst ourselves, jim stewart has joined us, he has been someone who looks at that, and one of your friends and meanwhile the gulf keeps going >> we got to find some way to say there's an alternative minimum tax if you're a billionaire. and just find it how creative - >> the top 1% do pay more as a percent of the overall revenue than their percent -- than their

what >> they do. >> a lot of people say i get to be a billionaire, i don't want to pay any taxes right? the wall street meme people. >> when you become a billionaire, you don't have to pay taxes. >> and it's like, i think there should be another way. i'd like to get some more money out of these people. >> guy, we will take a break when we come back, cramer's "mad dash" and a lot of sell side calls to get to, goldman, wendy's, dish, dash, we're back in a minute. we made usaa insurance for members like martin. an air force veteran made of doing what's right, not what's easy. so when a hailstorm hit, usaa reached out before he could even inspect the damage. that's how you do it right. usaa insurance is made just the way martin's family needs it with hassle-free claims,

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we wouldn't be here without our wonderful customers. we're really thankful for all of them. [female voices soulfully singing “come on in”] time for "the mad dash" and countdown to the opening bell. campbell's is a name we haven't gotten to yet. >> here is what is happening

a lot of people come on "mad money," and they say look, people have really changed their habits they are now having soup and they love soup, and after the pandemic is over, they're going to be drinking soup. well, they are they're just drinking it a lot less and that's what campbell soup said this morning in a rather disappointing quarter. because they also had some raw costs. mark klaus is a great ceo and you can't keep stocking your pantry if you can go out and if we didn't have wonderful science like pfizer and moderna, he probably would have had a great quarter. the fact is, the pantry stocking is over. and now people are back to usual consumption. >> and we are looking at the longer term chart. >> snacks were bad, also. >> cape cod chips. >> you have been generally impressed with him, i believe. >> i am. i am impressed with him.

>> and what he's been able to do since he took over as ceo. >> i guess i should have been more impressed with bourla and the people at -- >> pfizer? >> in terms of what they were able to do. >> moderna, dr. gottlieb makes me feel the same. >> moderna, also. >> the second shot >> look, this is going to take a lot of, smuckers had a good number, they're together, and you will see general mills go down and a couple of others with the action here. >> we're going tke aeyo epn e on all of those names as we get ready for an opening bell. stay with us

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a lot of head scratching regarding the 10-year. 1.484, below 1.5 since early may. so many cross-currents lumber is down 30% in a month but chipotle is raising prices 4% >> look, it is very, very hard to figure out what's going on. people will be looking at

rocket uwm. these are not meats. they're not meats. their earnings go up and the earnings go up, because we are refinancing there are more homes bought. it was a great presentation last week by toll brothers. the housing shortage continues and now the rates have come back down again i happen to -- >> they had that very significant fall though. >> they had some problems with the warehouse, and not problems, not credit, credit, didn't make as much money. >> it was less than people anticipated. >> right >> but they have a slot again, and i happen to like rocket very much i had them on and they need this movement, in the 10-year, it is extraordinary, given the fact that chipotle really put through a very significant wage increase, and i think that jay powell, just to be sure the fed chief, wants the wage increase at a certain level he actually believes, and david,

you can dispute me on this because you disputed me on my billionaire surtax but there are a lot of people who don't make a lot of money in this country and if they're able to make just a little bit more while they work at chipotle, isn't that fine >> yes, that's great i'm in favor of that who wouldn't be? by the way, there are an awful lot of jobs available right now, interestingly. if you're a teenager looking for work and mine don't wake up until 3:00 >> do you think to be a teenager, you're excited about that because of the minimum wage, to be a teenager again >> i'm just saying there's a lot of jobs available that are going unfilled you talk about it all the time how is it going to find people to bus tables? >> you can't because that's why i was at san miguel last night hosting, because the guy who hosts is a bartender. >> i was a bus boy and they made me wash dishes and my father came back, and he fired me

you're not a dishwasher, jimmy you're a bus boy >> demoted from dishwashing. >> yes. >> the jim cramer story. [ laughter ] >> the opening bell here at the big board. trevor projects celebrating five months at the nasdaq, payments processing company and marqeta, celebrating the ipo and robinhood celebrating probably a july issue. >> i support the trevor fund and we have been involved in that i think it is a great charity. and always should mention charities when you know they're good especially for this month, for gay pride. a lot of these ipos are very interesting. i was spell-bound at how interesting this was it is really again, with fintech, when we start seeing

this buy now, pay later phenomena, it is another phenomena as a teenager, you would have liked. >> yes >> you mean the affirmed sort of - >> i had affirm on >> i think it is fantastic not everybody has enough money to buy everything and by the way when we have to start paying, when you have to pay your student loan again, you will need this buy now, pay later >> yes. >> how many trillions in student loans. >> i know. and clover of course, the volume in these things is also -- >> it's amazing. >> yes, even before the open, i mean clover has already traited 40 million shares. its 30-day average is 36 million so it basically already traded the average full daily volume. >> these people are having the time of their life. >> and mola said yesterday, 70 to 80% of meme investors are just having fun. this is what the wires said. >> they just want to have fun. >> yes >> all right

why not? >> it's a cindy lauper market. >> i do know the cohort to some extent freshmen, sophomore, doing this stuff, buying and selling these things, crypto, it's fun i guess. >> and educate them. >> and the fun will stop it will stop and they will lose money. >> i call for education this morning in the tease, and that was resoundingly rejected saying i'm so obviously old calling for education. >> let's go old school back to merck if we can. because we haven't actually gotten to it this morning. >> oh, merck yeah merck. >> i'm sorry i'm sorry. my mom always said cover your mouth when you yawn, so i did that >> $185 billion company makes a few pharmaceuticals. >> they have a dividend. what's the dividend? >> they got a dividend, too. 3.8. somewhere in there right? >> there it is 3.5. look at merck. up 1%. the story i've been following closely, of course, because i

know -- the trials that they haven, finding people for the enrollees, and those who got the virus, who aren't overly sick but in a higher risk group, for example, over 60 years old, so then they got to roll a lot of people, and all that said, probably the fall is what merck continues to point to and we will get the results of the phase three trial. the news of course is the u.s. government has said, we will pay $1.2 billion for 1.7 million courses of molnupiravir, and that is about $700 a course. 10 million plus courses will be available by the end of 2021, and one would expect other countries will also step up in a similar fashion to have this on hand there are any number of people who are not vaccinated there are variants of the virus

that will continue to unfortunately be around, and the expectation is that anti-viral will be able to knock those down if given early, particularly for those who are in vulnerable populations, but even for everybody, as i've said, many times, as tamiflu, and all of that is pending, getting emergency usage authorization and/or final fda approval but there is a look at merck it could become a substantial generator of revenue >> look, this is really important, dr. gottlieb said this morning, it's not, when you're protected by these vaccines, there's still like 85% as opposed to say 90%, you know, that's 15%, it's a lot, that means that somebody you hug or shake hands with, if you do it 100 times -- >> this has tended to actually be, when they get a break through case, if you actually know you have it, it ends up not being -- >> although as was said last night, we are on pace to maybe

fall below 10,000 cases next week we had 18 states yesterday post fewer than 100 new cases fewer than 100 18 states. >> we're so lucky. >> we're still not at 70%. we hope to be by july 4th. 70%. >> we're really lucky. >> if you consider india, and you go back to what mark benioff did, sending that giant plane over to india and the fact that they're short oxygen >> and the case loads have started to abate in india as well through lockdown measures >> and the stock market hit a high >> interesting >> like you said, memes in india? >> i don't know what's going on in india we know what's going on here with the memes >> but it's so horrible. i mean they were telling, the government was first talking about how it is wash the surfaces, i mean it's an aerosol issue, and they just did it all

wrong. now they're getting it right. >> talking here. >> well, here, too. >> but india, i feel so bad. it's so hard to see. we would do anything we can to help them. anything >> guys, a couple of research notes caught my eye this morning, sort of in my area of interest, dish shares are down 3.25%. it was a downgrade this morning from jpmorgan. they cite three major concerns and they talk about the point at the overall multiples, just being quite high at this point, and they say listen, it's not easy to build out a new wireless network, and that's true and by the way, there are 114 megahertz that they have of total spectrum, well now you've got the other three carriers out there. and they have a lot more remember the recent spectrum option of course, we spent a lot of time talking about, they got a lot more, not easy to compete against them and finally, you had this window where you can differentiate because you are going to be all 5g right away from the start and that window is starting to close. so for those reasons, they downgraded

over at wells fargo, they upgrade fox, and i thought this was a really interesting piece. >> i know you've been focused on the growth of basically sports betting, which is in some ways certainly is connected into what we've also been talking about for the meme stocks or at least the way some of the young people trade them look out a couple of years and we think fox-a will be a sports betting stock with media network assets versus today, as a media networks business with some betting investments. >> very interesting. draftkings, i did a program with draftkings, i think the stock is undervalued but again, it peaked, a lot of people believe it peaked because what happened with the football season, you didn't get a gigantic surge, professional football, in say march madness, whatever, but - >> it's interesting, because historically, especially when daily fantasy evolved, they thought game frequency was going to be the big thing. >> yes >> baseball, basketball. >> yes. >> but people still love their nfl. >> they just love it

the nfl is extraordinary this year. >> and the deals are all done. >> fox of course, not going to start the direct to consumer, the way everybody else has, and the question is, is there a pivot in their business model, this analyst seems to think that it's possible. >> they have to. >> given some of the acqui acquisitions they've made quietly. >> and a lot of these companies are very skittish about talking about even the line. but as it gets more and more legal, what are you skittish about? >> it's growing. it's growing enormously. >> oh, my. and each state >> what do you think is the best way? if you had to pick one or two securities to buy, to play this overall theme? >> you would do pen national which is the sports book that, barstool, and portnoy, jason, very good, and then you would do draftkings, which has a very smart group of people on top of it, jason, very smart and when you look at these, you have to take it from the prism that

people are going to do in-game, much more in-game gambling, and that's going to be what really happens and that's going to be what really drives things. don't forget casinos will be open this year. >> i'm looking at caesar's now year to date up 49 and goldman has a chart out about gambling and gaming revenue, almost back to pre-covid. >> yes. >> and that's without international, and it's without corporate. >> look, i think it is also a lot of fun i mean you know, we used to, for my program for bull market fantasy, we'll derive question, kind of like, you know, who is going to have the most touchdowns but if ut you look at tr draftkings, if aaron rogers starts for an nfl team this year - >> i follow him closely. >> yes. >> competition. >> yes, he wants the jeopardy job. >> he wants it. >> doesn't he have enough? >> can't he just leave a little something for the little guys?

>> shailene woodley. >> one of the greatest qbs of all time and he looks like that. >> don't be jealous, david don't be jealous that's a really very ugly -- >> we're talking about sports betting. sorry, right >> david, by the way, apt, got a $725 million veterans contract i wanted to say something positive. >> well i look to come back quickly, the meme stock, this clean energy is also - >> well, that's -- >> that's andrew littlefield i used to have him all the time. littlefair i'm sorry. so you have to look. this is long haul natural gas. also short stuff but what is really important here is in ten years they've only had one year that they've had income, and i know, and with a wealth of technology, but the fact is, it has, every time it has taken, thought to be taken off, you get the actual trucking companies, many of whom i've met with on this, just saying, look, it's not going to happen, it's

just going to be small time, but andrew littlefair, communicated recently with me and i was skeptical because of the problems with them actually not making money, but that has not stopped a lot of the meme people, because the concept is so good. we would love to have natural gas be a cleaner, better - >> and i know you discussed lordstown with becky a moment ago. back to ten. strangely, rbc initiates today with a $5 target they don't see ebitda break-even until 2025 so they got to raise another 2 1/4 billion to remain solvent, we know about the ongoing concern. is this not a lesson to those who wrrode it into the mid-30s with >> is it ever a lesson and i had them on and the company was highly promotional about orders and if you didn't get it going concern letter, i would have to think that's a tough thing to get >> yes, it is. it's not a good sign when you need to raise that much, if you're not elon musk.

>> sub optimal. >> if you aren't an incredible promoter >> when the company came on air, i mean to me, you know, the guy presented himself as - >> march 18th. phil lebeau took the ceo on, on this very topic. here's what happened >> never said we don't have orders we don't have a product yet. by definition we can't have orders we have very robust interest and that's what they are, they are letters of interest, you can't do any more than that, in this stage, so i don't think anybody thought that we had actual orders we just, that's just not the nature of this business. >> i mean i thought that was an amazing interview because i thought that they had actual orders because of some of the things, i don't know if we can call what he said on "mad money," but letters of interest, i presume that those were, you know, kind of orders what did they say? i am sending you a letter, i am very interested, but i'm not ordering that's possible. i'm very interested in the new

maverick >> a letter of intent. >> loi >> kind of an loi. >> the force majeur. >> you speak that language. >> i do. i have >> what happens if it breaks the $10 -- sorry -- it doesn't matter there is no ten dollar dollar -- >> that's the reason you mentioned it. >> it was such a good idea a plan being brought to life. the plant. ohio maybe they will raise the two and a quarter. >> maybe they will. >> a dream come true story if i were the prc, i would say you know what, we are going to demonstrate our ability to put differences aside, we are going to invest in lordstown >> i know who it is, yes i didn't see that coming >> belt and road initiative is alive and well in milan but not in lordstown >> okay you naysayer. >> s&p is up for the 10-year,

below the 100-day yield, below the 100-day average for the first time since october let's get to rick santelli good morning, rick. >> good morning, carl. you know, i love watching these yields because i just love talking to other traders about what their perception is about an economy that is hot, definite tally there's some supply -- definitely there is some supply issues, inflation is the common theme. every country is printing to the tune of, are there enough trees in the forest? and yields globally are going down does that sound like we have confidence to be able to countdown price discovery to reflect the true risk/reward of the interest rate complex, because i think therein lies the issue. look at a 24-hour chart of 10-year. 1.40s now. and if you open the chart up month to date, this is the seventh session of june. right smack in the middle. you see where all of the drops have started where yields started to move

down 8:30 eastern on friday, jobs friday the jobs friday really underscored so many different dynamics, that we are reopening on a hot scale, in many countries, and many countries are ultimately going to be there with us, but the issue is, that as we are opening up, not only do we see that we have in a way created policies that are exhibiting a better opening, we can't seem to find the people that are unemployed to take the jobs that are being offered, you can put forth any reason you want, but there are lots of little glitches along the way. and should 10-years close at current levels, be the lowest yield close since the back end of february as you see on this chart? now, if i think about inflation, the equity markets just seem to be a natural place, especially now that the complex of the treasuries just doesn't seem to reflect that concern, let's look at a chart, pre-covid,

september, 2019, crude oil, and the dow jones industrial average. boy, they certainly seem to rhyme a bit, don't they? and finally, today, we saw the release of producer price index, and cpi, in china, year over year the ppi in china hottest since july of 2008 carl, jim, david, back to you. >> all right, rick, thanks. let's get to bob pisani as well good morning, bob. >> good morning, carl. hopefully we will close at a new high today we have been waiting for days if it will happen and a little bit of a disappoint because the bond yields rick was referencing should be helping stocks not so much. look at the sectors. tech leading and a lot of debate whether growth will come back in the second half of the year. energy and reits big this month. and banks are down because yields keep droing and rick is on top of that of course and why are the bond yields lower? you saw what rick was talking about. the low descent and it started

even what was going on with the jobs report, but a number of good points that the traders down here keep making the last couple of day, maybe some less lavish spending from washington is partly responsible and a lot of people are talking about the potential for slower growth in the second half of the year. some believe maybe the fed is right, the inflationary pressures are transitory a lot of different debate about the causes but one thing is for sure, costs are going up you see what the campbell's ceo said this morning? our results impacted, rising inflationary environment, short-term increases in supply chain costs, this is the ceo, and some executional pressures as we continue to advance our agenda, primarily in our isn't that corrects division but a lot of of people, a lot of companies talking about costs. brown-forman talked about costs. and sherwin-wlilliams. and chipotle hiked menu prices 4% and uber and airbnb, and raising

prices, and forget about low cost taxi rides. that's definitely not going to happen anymore cpi storm. that's what a lot of people down here will be focused on for a good read on inflation keep an eye on that one and growth versus value and everybody will try to figure out the second half of the year, and cathie wood talking about growth will outperform, here is the story. value is up twice as much as growth this year so far. inverted beginning about february and the index guys point out the obvious. stop debating this if you would have just owned the s&p 500, you would split the difference and be right in the middle value and growth are very confusing categories value is things like oil stocks, and things like retailers, likes gap, commodities like freeport and some of the banks like wells fargo. but there's other stocks like l brands that are in both of the categories so it's a little bit difficult. growth is not just technology stocks cater pill ser a growth company for example. deere has been a growth company for the last several years these are not easy categories to figure out

i would simply say split the difference and the index guys have a point just owning the s&p 500. finally, power lunch today, want to talk about meme stocks? let's talk about it with the guys in charge gary gensler, the head of the s.e.c., we will talk to him about robinhood and talk to him about what is going on with all of the meme names that jim and everybody else has been talking about, payment for order flow, and we'll talk of course about what's going on with climate change, and the s.e.c.'s efforts on top of that, and of course, what's going on with bitcoin, as well it will be a very interesting time carl, back to you. >> bob, thanks bob pisani. so we have the nasdaq up for four days in a row we haven't had a streak longer than that since early february and despite all of the churn the s&p is trading above a record close. back in a moment

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take a look at a one week of bitcoin. you can see we're up almost 6.5% today. it's had a myriad number of

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it's time to jim and stop trading. >> shir win williams is down

who can pass on who can't? i use frank mitch to try to look at the chemical side they are going to have margin compression. and a lot of people don't want to buy stocks even if they say demand is good if there's margin compression. i think it's a great company but analysts say if margins are under pressure, we don't want to be in it >> the credit suisse update says crest could go up. >> whitener is on fire i don't know how they're going to do it, but colgate is making right moves. tooth paste whitener is going to cost a fortune >> 95 target on cl that's a 14 % up side. what's tonight >> i have crowd strike, one of my favorites an paloalto i have an old friend from high school

former head of the cftc, critical of a chain in the demand of crypto it's tether. and we're going to talk about it tonight. because tim has scared me. and tim's a smart man. look him up. you'll see what he's going to be saying tonight when we talk about it it's not -- he -- i'm pro crypto, but i'm worried about this one part and i'm worried about getting a percentage on my cash 8.6. >> no explanation. >> doesn't make sense. >> something wrong with t. >> all right thank you, guys. >> goodone we'll see you at 60.:0 a lot more on the meme stocks when we continue don't go away. ha ha. jill is certainly upset with that unexpected bill from her back surgery. aflac! let's see that one more time. ♪ ♪ (bleep) (wincing) oooh, right in the wallet! ouch! aflac! aflac would have paid jill cash directly to help with expenses health insurance doesn't cover. hold on, i think she's trying to give us a side-eye...

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good wednesday morning welcome to another hour of "squawk on the street. live from post nine of the new york stock change. nasdaq is up and the s&p trading around a record close wholesale trade data is out. rick santelli has got it rick >> yes our april final read on wholesale inventories comes in at up .8 that's exactly what the mid

month read was, so it remains at .8. just for context's sake, if we look at the high water mark because we are definitely in search of inventories, it was up 1.4 at the beginning of the year in january that was the best level month over month of inventory increase since may of 2011. on the trade side, also up .8. now, this is just one read we don't have a mid month read and it follows sequentially 4.6. we could really see it taper off for a variety of reasons, not the least of which is some of the supply chain glitches and certain parts of the manufacturing world, of course, that have eased back a bit while the service sector kicks in fourth gear. morgan, back to you. >> the whole picture for wholesale sales. rick santelli, thank you we're 30 minutes into the trading session. here are the three big movers. campbell's soup with earnings below forecast

as results lagged the year ago figures that were boosted by pandemic-related demand. as you can see, the shares down 6% an upgrade to buy from hold at wells fargo with a firm saying the stock could benefit fox presence in sports despite pressures from cord cutting. shares up 3.5% we'll end on something we talk about aurve. bitcoin bouncing back as the volatility continues el salvador is the first country to adopt it as legal tender. we'll look closer this hour at potential opportunities. >> speaking of voil latility and expanding tickers. >> the reddit crowd has a new target clover health. shares of the medicare insurance startup jumped more than 85% on tuesday.

it was one of the most mentioned tickers on reddit's wall street bets forum it has more than 10 million members. one thing that tends to attract the so-called yolo or you only live once traders, is heavy short interest when they see a large amount of investors betting against a company, they often try to gang up and prove them wrong and make money in the process by piling into the other side of that trade reddit traders know this tactic well after game stop in january, and this week are encouraging each other to take advantage of the short interest in clover about 44% of clover's shares are sold short that's according to data from s-3 partners that's basically more than double what amc and game stop have they've been adding to the position over the past 30 years the amount of clover shares shorted went up we 25% short sellers lost roughly $500 million in a day alone and the bears could be adding fuel to the rally in what might

be a short squeeze, the heavily shorted stocks stop and people are forced to close positions to cut the losses rallies in amc and gamestop added to the recent pain losses climbed to 7.3 billion. and 4.5 billion for those betting against amc. >> as kate mentioned, not all the attention anymore is on gamestop or amc. kristina has a look at some of the other names that are being watched right now. and you never know who is going to be next, do you >> and i sense a theme right now. because we've been talking yes, game stop, amc, all these companies rightfully getting the headlines. but there are others that are lurking in the sub reddits of wall street. t ticker wish, gaining nearly 50%

on tuesday it was the second most mentioned name on wall street bets sub reddit over the past day and could be seen as a short squeeze which kate eloquently explained with an 11% float shorted. another one, car lots. a used car and consignment dealer continues to climb. the stock popped over 28 % yesterday. although, there was no specific company news aside from a new hub in virginia. watch chatter thrived on thin twit and discord the top tries are electric vehicles, cannabis crypto and anything to do with gambling cannabis, here's the till ray ceo comments on closing bell yesterday. >> it's a great base of shareholders to have because they're so educated about your company. and educated about your products it's amazing when you come back and look what they're posting about the products >> they may not be amc or gamestop which still i have to point that out they have a heavy following

online, but there are other trending names like clean energy, fubu, others lurking in the sub reddits. what does it take to be a name have a bump in trading volume or a large short interest along with a ton of support in on onforums or the simple belief the stock prices will shoot to the moon >> rocket emojis abound. it's a great place to start with the ceo of investing platform, betterment >> thank you for having me >> i realize that betterment is more focussed on pass i investing. we're talking about digital advisory firm here, but you have surveyed the landscape around meme stocks as well. i think you're getting ready to release the results. what have you found? >> we have it's interesting i think all the focus has really been on these meme stocks and there's a lot of conversation. the truth of the matter is it's

a gory time to be in fin tech. there are positive trends and negative trends we're seeing first, meme stocks are driving incredible stress. day trading is stressful we asked our participants what they thought about how to balance long-term investing with the day trading. and we learned that 30% of their assets generally are in day trading. whereas 70% are being put aside for long-term future retirement and diverse investing. we think that's actually one of the greatest insights from the information. that's really key. because i feel like there has been this sort of black and white narrative, worries about the retail investor. betting everything they have in the midst of the crazy moves in a number of stocks what you're saying is not that different from the other ceo in the sense of there's more sophistication than is being led on in the public discussion

happening off of these social media sites. that being said, when you break down numbers, 30% versus 70 %. what does that mean in terms of opportunity for more business for betterment >> well, look, we saw an incredible first quarter, and i think all of this spotlight that's been shown on digital investing is really about the general investor becoming more comfortable, moving their money onto new brands, onto fin tech providers and moving away from some of the incumbents we saw 118% growth in net deposits in the first quarter as an example just of how comfortable people are now interacting with an innovative easy to use platform and seeing that as really the key to unlocking their financial future how does retail investing evolve and how are you investing in the company for that >> sure. well, you know, i think personalization is really one of the things that's driving the emotional connection you're seeing in the meme stocks. it is a game but there also is a sort of

values alignment and an engagement opportunity so as we think about kind of the robo investors of a decade ago, it was more of a set it and forget it idea as we think ahead, we think there's an opportunity for vatted choice. we'd like to give kind of more personalization opportunities to our customers, and allow them to engage but do it within a guided framework and often the education they need to make smart choices. >> i wonder if you can characterize how this meme audience is handling loss. because we've seen examples where stocks either on fundamental news or not, do go negative, but the meme is diamondhands are they demonstrating over time they have tolerance we're not used to seeing? >> i think the challenge we see is a lot of people are going to lose money gambling. this is gambling so the data suggests that on average and over time, you're

going to do better in a long-term diversified solution and so for us, we think the question is can we find a way to really make that emotional connection but make it in a long-term diversified way. we're seeing as an example, socially responsible investing that's a great place where this generation can vote with their values, put their money where their emotion is, but do it for the long term and do it -- do well while doing good. that's an example of matching the emotional piece of what you see in meme stocks without the fear of outsized losses. >> it was only a couple years ago we were hearing that millennials were underinvested in the market. these were some of the dynamics with this generation having come out of the financial crisis, but this generation had not been participating in the bull market we had seen precovid the fact we're having this conversation today whether it's day trading or longer term investing which i know you're

focussed on in the millennial market, does this represent a moment or a shift in which younger adults are finally getting into the market in general? >> well, first of all, these millennials are finally coming into wealth. they're entering their highest wealth earning years and there's going to be much reported transfer of wealth from the boomer generation. nearly $30 trillion coming to them i think what's exciting about the opportunity is that these are customers who are interested in working with brands that believe in them, that share their values, and that represent innovation so we do see this as an opportunity for them to begin to enter the market and importantly, to begin to save for the long-term. right? and for us, we've actually turned some of our focus, a meaningful part to retirement for this reason, because now that they have the assets to invest, we want to help educate for the long term. >> sara, something else that we've been covering closely, perhaps overshadowed by the meme

trend is esg probably a lot more important for the long-term. what are you seeing among your client base in terms of raising assets among that, given how important it is for the index, for example? >> so we love esg. we talk about it as socially responsible investing. we think it makes more of an emotional connection when you talk about it that way and we launched last year three socially responsible investing portfolios a broad portfolio, a comet, and a social portfolio that is focussed on gender and racial inequality we have seen incredible adapgs and accumulated more than a billion dollars in assets in under six months in the portfolios they're growing at twice the pace of any of our core portfolios we think it's because we're meeting themoment, striking a nerve, and we're connecting, an emotional connection and money are a really important place we think we can play. >> quickly, sara, crypto will you get involved in some form or fashion?

offer some sort of product >> i think we will ultimately, but right now we're thinking about how to do that within a long-term balanced framework and to think about it through the guyed lens, and to think about it as an asset class to hold for the long term. not in the vein of watching the daily fluctuations >> sara, thank you for starting the hour with us >> thanks. i appreciate it. as we head to a break, here's a look at the road map for the rest of the hour and it ends a big hour bitcoin bouncing back after a volatile week. the hunt is on for the tax leaks that revealed major financial information on some of the world's wealthiest -- >> and ford says there's substantial doubt about the ability to continue as a going concern. more "squawk on the street" continues in a moment.

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zwlnchts markets are drifting higher this morning. the s&p, you can see it right there. up .02 % it's just below the all-time high joining us to discuss some of his top picks, tony. tony, good to have you this morning. it's funny the story of the morning is probably in the bond market, not the stock market with that ten-year yield backing off to below 1.5. i'm curious, does that have any impact skroverall in how you vi the market from here right now given growth versus value and where your focus is at oakmark >> it doesn't.

at oakmark, we look at investing one company at a time, bottom's up we look for good companies with good management teams at discounts to intrinsic value and try to cancel out the noise as to whether interest rates are up on a given day >> you've done a good job as we look at the oakmark global fund or the select. we've been outperforming this year what is it -- we've had you on a few times. the portfolio doesn't change much that's good. you're a long-term investor. what is new? any new theme or names you want to stress with us? >> no new themes a name that we bought a couple quarters ago across a couple funds that i find really interesting today is pffiserv there's a merger that happened in 2019, a software and payments company. it's valued like a dine sore in

the payments company, but it's anything but and the management team has been making investments to make this a long-term player when you look at the valuation on the stock, it sells including synergies from the transaction around 16 times earnings that's a 30% discount to the overall market this is a company that deserves a premium to the overall market. it has a terrific management team led by the ceo who at the most recent analyst day committed to allocating 40% of the current market cap in mostly share purchase over the next five years that's an 8 % return without the deserved multiple expansion that we think the company deserves in a world where treasuries are like you said earlier, 1 .5% this morning tony, i realize that you're not necessarily paying attention to to daily moves across the

portfolio or looking at rates. but looking at this year and beyond, what are you anticipating in terms of a rate forecast and what that will mean for equities, especially as we talk about the fed talking about tapering and inflation and everything else that is drawing investor's attention right now >> we own financials you have to think about interest rates. the way we've done that is take a fairly passive view in the short-term look at what the futures market is projecting and eventually assume four or five years from now that there's a very small real rate of return on risk free assets if you look historically, it's not a wild bet to be making. but again, several years out and if you factor that into the financials today, they do look pretty attractive. >> you know, one more part of the macro discretion today is why equities, some argue, specifically over at morgan stanley, why equities are not looking to the bond market for signals about how to rerate in advance of some kind of tapering cycle. i just wonder do you consider

the bond market a good tell these days >> the bond market can be a good tell we tend not to focus on that we, like i said earlier at oakmark, we go one stock at a time what are the future cash flows of the business, what are the risk factors how do you discount it do we like the management team if it's selling at a great enough discount and meets our criteria, we're going to buy it irrespective of any noise in the interest rate or market environment. >> what's the average hold time in the portfolio for your average position >> turnover tends to be between 25% and 30%. we don't manage to that, but that's typically how long it takes for value to be realized when you buy companies at a discounted value like we do at oakmark, sometimes the market takes a couple years to agree with you >> yep we have seen that happen and watched it with oakmark. tony, preerkt your updates thank you. thank you.

we're going to turn to ups which is in focus as the investor day is underway as we speak. the delivery and logistics giants laying out a 2023 revenue forecast of 98 to $102 billion ups posted 84 .6 billion in revenue last year to give you context there. the company targeting adjusted operating margin of about 12.7 to 13.7% in 2023 analysts note it's an improvement versus recent years in the performance we've seen there on that metric capital spending for 2021 to 2023 is expected to be 13.5 to 14.5 billion but ups also unveiling esg targets saying it aims to be carbon neutral by 2050 to get there by 2035, it's looking to reduce co2 per package. it's looking to power all company facilities with

renewable electricity and have 30% of the aircraft fuel mix be staebable jet fuel options ups is joining fedex in the efforts after fedex announced its own plan in march to be carbon neutral by 2040 as you can see, shares of ups are down this morning about 2 .5%. however, they are up more than 90% over the past 12 months. >> quite a run speaking of quite a run, dish shares have had a nice move this year they're down about 4% today on a jpmorgan downgrade they site increasing competition in the wireless industry has the spectrum to do so for 5g the window getting tighter and tighter for them to have with jpmorgan believes to be a competitively dominant product, if you want to call it that. price target $45 a share, actually, went a bit higher. "squawk on the street" will be right back

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trading at all-time highs. up about 16.5% so far this year. it's under a little bit of pressure, down about half a percent. top holdings including tech straw and huntington engles have added to the gains another name that's having an outsized impact is virgin galactic galactic has more than doubled since mid may following a successful test flight and as the space tourism market continues to heat up with blue origin, continuing to spend jeff bezos to space as well as the winner of the online auction that ends this saturday. the highest bid for the spot with blue origin is 3.8 million. since the report surfaced yesterday saying sir richard branson could look to move up his time line to a date ahead of bezos, this statement was issued saying we're in the process of

analyzing our data from our successful flight. we expect to complete it this summer through early fall. it is a name that continues to be on watch, carl, and then you couple that with expectations around the rebound and commercial aviation and defense spending proposals that are actually better than initially fear and you see strength in the sector >> wow just an amazing change of fortune, really. over the last month or two, incredible >> still to come, what elsa -- we're back in two minutes. you packed a record 1.1 trillion transistors into this chip i invested in invesco qqq a fund that invests in the innovators of the nasdaq 100 like you become an agent of innovation with invesco qqq

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here's your cnbc news update at this hour. president biden has started his first international trip as president after a run-in with a

cicada on the tarmac he boarded air force one earlier the press blame for the trip was disabled after cicadas got into the engine. biden has also signed a new executive order to block tiktok and other apps the biden administration will do an evidence-based review of potential security risks val demings launched a bid for a florida seat she's challenging marco rubio. and video released of casey ramted coming to the aid of a baby in a car who was choking. he is a licensed paramedic he slapped the baby on the back

dislodging a cherry so the child could breathe again. absolutely terrifying, but thank goo goodness, it seems like that baby is okay >> the things we rely upon from the police fantastic. thank you. welcome back to "squawk on the street". we're about an hour into trading. s&p really hovering around 4232. that's the record trading close. gainers fox, some of the laggards surrounding research, dish among them as we look at the worst performing names on the s&p at the moment. >> all right well, bitcoin's volatile week continues today. elle salvador is the first couy to approve it as legal tender. joining us is the exclusive of stable coins by facebook backed dm allen, it's great to have you on the show today

>> thanks. it's great to be here. >> given this news out of el sal salvador, i want to start there. we're hearing more and more talk about whether it's bitcoin in a particular case of that country or whether it's central bank digital currencies being looked at at different countries around the world right now. what do you expect that landscape to evolve into, and what that also means for a bank, a financial institution such as yours? >> sure, morgan. great to be here again thank you for the opportunity. and what you're seeing is just this constant adoption of bitcoin. we've been seeing it since we first started looking at the space back in 2013, and we opened our first account for a bitcoin-related company in january of 2014, and we just have never looked back each one of these cycles kind of has its own theme, and the theme

certainly through the pandemic over the last 18 months or so has been this constant move to digital, and the digital currency market is just really reacting positive to that. you've seen everything from the institutional adoption, microstrategy, now companies such as -- countries such as el salvador looking at bitcoin as legal tender that's something that the bitcoin community has been talking about for years. and it's great to finally see it happening. >> yeah. and i realize that you are involved in and supporting with your infrastructure all of these different pieces of the crypto currency puzzle and offerings that are out there, but how would you break it down between the bitcoins, the stable coins, like, dm, which i know you're working with as well versus the possibility of, for example, the central bank digital currencies that we could see emerge, too?

>> sure. there is a very distinct difference a crypto currency like bitcoin is a permissionless nonsovereign distributed store value. it doesn't have a ceo. it doesn't have anybody that controls it. and -- but when you get over to the stable coin question, stable coins, as you mentioned, silver gate is the -- is the exclusive issuer, will be the exclusive issuer of the dm u.s. dollar-backed stable coin, and that is by design a permissioned and a centralized digital currency that is essentially to maintain a stable value so that it can be used in commerce without the volatility that you see in decentralized currencies such as bitcoin. and then to touch on the last part of your question, the

central bank digital currencies would be yet one step further where they would be actually issued by a government, and you've probably seen that dm has actually commented on the fact that they view this and silver gate does as well, as an evolution toward ultimately the potential for central banks to issue their own digital cu currency >> what does this do to the dollar longer term. we've seen some of those debates emerge as well >> yeah. that's a really important question, and this is one of the reasons that i don't believe this is going away is because as you know, and as all of your viewers are aware, the u.s. dollar is essentially the reserve currency for the world and i believe that the u.s. government actually wants to continue to see the u.s. dollar

thrive, and as the entire world goes digital, it's a very important question there are a lot of things to work out i know the federal reserve, the u.s. treasury, other agencies have been looking at this. we've been involved in many conversations in this regard as well and many people view it as inevitable, but how that ultimately looks, i think, is still yet to be determined allen, the two other news points this week that have gotten lots of attention one is the irs asking congress for oversight authority. has that been effectively priced in, do you think and the other is now we know the fbi can break into bad guy's wallets. does that remove the argument that it can be used for bad actors >> i'm glad you asked that question on the second part of your question first, you know, we've been saying for years that if a

criminal is going to use bitcoin or another digital currency that is on an open permissionless but yet a very transparent public block chain, that it is much easier to track that -- that criminal activity, to track the funds that have been used to support that criminal activity and so this was not a surprise to us at all in fact, as soon as the colonial pipeline news started to break, i was actually speaking with others, you know, in my circle and saying it will be interesting to see how quickly the federal government can actually track this payment, and you know, see if there's a way to get the funds back. importantly, and i think you understand this, carl, but the bitcoin protocol was not hacked. the bitcoin protocol, that is

still safe and secure. but importantly, the transparency of the protocol allows for law enforcement to actually track these types of payments i know that's not really popular in the libertarian side of the bitcoin community, but certainly for us at silvergate, as a regulated financial institution, we fully cooperate with all law enforcement and all regulators to make sure that we are keeping bad actors out so -- and then as far as the irs question goes, once again, this has been something that i think has been looked at for quite some time. there was news several years ago about the irs trying to understand how folks were using bitcoin and other digital currencies, and so this also was not really news. >> of course, we'll continue to

monitor the regulatory landscape, the discussion we're getting, something i suspect you have sekey insights on given tht they're a regulated entity thank you for joining us today great to speak with you. >> thanks. great to be here as we head to break, there's a look at the stock price of lordstown motors it is down almost 14%. the company saying there's substantial doubt about its ability to continue as a going concern. it needs to raise more money if it's going to be able to fund the commercial production, but you're looking at it right there. they're not going to hit the road any time soon so yeah, rides assembled, but don't expect to take one any time soon in a lordstown vehicle.

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truly absorb the natural goodness. new chapter. wellness, well done. news out of washington d.c we're turn to elon >> president biden has just issued an executive order revoking the actions of former president trump that were targeted at tick tak and we chat we issued kexecutive actions. the executive order directs the commerce department to evaluate transactions that involve software applications that are owned, controlled or managed by persons as support foreign adversary or intelligence military activities or involved in malicious cyber activities. there's a series of reports in the upcoming months to recommend

further legislative or executive actions, but this order does call out china in particular as not sharing america's democratic values and as engaging in unacceptable national security risk while advancing authoritarian controls and interest again, president biden revoking those actions against tiktok and we chat, but also calling for the commerce department to conduct its own reviews of software controlled by foreign adversaries. guys >> between that and the senate, it's been an eventful 24 hours regarding china. apple continues this week. the worldwide developers conference showcasing new upgrades to many of the operating systems. joining us is rod hall, goldman sachs' analyst welcome back it's great to see you again. >> hey, carl it's been a while. nice to see you. >> i was just going to say, is this the first time we've had a chance to talk to you since you removed the sell which we all know you were pretty resolute

about for quite a while? >> yeah. yeah, it has, since april of last year. move to sell, we recently upgraded to neutral. >> what drove that move, and do you feel good about it so far? >> the move up, yeah what drove it is apple reporting excellent numbers. we kind of highlighted all through the sale rating that we thought if apple was going to beat consensus, particularly year four consensus, we would upgrade the stock, be less negative on it, and sure enough, they did, as you know, the march quarter numbers were pretty much a blowout. so we thought it's best to take a step back here we still kind of have this same long-term view of apple. they're going to struggle to grow we think the company not because their products are bad you see the worldwide developer conference this week, a lot of great products being rolled out. a lot of great platform features, let's put it that way. so nothing wrong with that it's just that the company has penetrated this high-end of the

consumer-base globally, and it's tough to grow from where they are today, we believe. so that's why we have this more cautious view of apple long-term. you need a catalyst for the cautious view. back in april we thought covid would be it. we thought the low end of the economy, the services workers being decimated by the lockdowns would impact the higher end of the economy, and now we know that didn't happen we get things wrong once in a while, and we took our lumps on that one >> you're not the first in the history to do so have we dwgraduated to a moment where it's still about phone production the way we think about apple classically, or are there other things that act as a catalyst for the stock >> the way we think about it apple is revenue per user. so we don't think necessarily just about the phones.

we think about how much revenue apple generates per user in the user base. and what we see is the user base isn't growing much it's maybe growing close to gdp growth rates you penetrate all the wealthier people in the world. higher socio-economic cohorts. if you look at the revenue per user, that's been static the last few years now, probably during covid we suspect it bumped up as we know, everybody was home buying laptops and services and so on downloading apps we believe that overall trend for that revenue per user has been pretty flat, and as a result -- we think apple is struggling to grow you've penetrated all the people you can, and those people aren't spending inning a regrat more money in the platform over time. >> yeah. and you're not alone in that view it's been a proper one this year, given the performance of the stock. i wonder is this new focus or

even stressing more the privacy issue, do you think it's got some marketing muscle for them in terms of finding perhaps new users? >> yeah. i think -- i think marketing privacy and apple is a great privacy company. if you want to protect your privacy, there's no better platform to put all your information on this. this company, i think, absolutely wants to make sure your privacy is protected. they are taking steps that we don't see any other platform taking so yeah, to market that, to get people to pay something for it, i think is important for the company. what we see here with i cloud plus and the privacy features is you're not paying more i already pay for i cloud storage and in fact, i pay for the whole bundle, but -- so i get all the privacy features already. my price hasn't gone up, but i think what they're trying to do is to get more people in the platform that actively pay for services, and we would estimate

maybe only 20, 25% of the people would be installed-base users are paying for services outside of apple card. if you think apple card, there's better penetration, but if you look at music and tv plus and bundles, you're probably sub 25%. yeah meantime, rod, china i mean, obviously key market for apple. we have a new administration in place that continues to be hawkish on that country, and especially when you talk about the trade dynamics or national security dynamics. there's u.s. innovation and competition act that has a $250 billion tech focussed bill that made it way through the senate that is focussed on investing in new technology and semi conductor manufacturing as well to counter china what are the opportunities there in terms of your coverage universe and the different names that you follow so closely? >> okay. yeah you know, in terms of semi

conductor production, i guess the only company we cover is qua qualcomm they outsource all their semi conductor production having some on-shore production is quite important for a lot of our companies. that production likely is more expensive, so if the companies weren't going to see in their ug costs to produce these products like iphones or modems for iphones in the case of qualcomm you would need to see probable some kind of subsidies like that to help keep that cost down if you were to move production onshore. apple, i think their value system is, you know, makes the company -- they've made indications publicly they would like to move out of china or have a more balanced position from a production point of view globally, but it's really tough to get out of china given the volumes they do. these are insane volumes they produce on the iphone, only

foxconn is able to assemble that many iphones in the short time it needs to be done and then you have all the supply chain behind that it's tough to get out of china, but i think it's good for our company to see some diversity of production we've seen what, you know, how much risk there is with covid and so on, so it's nice to see global diversity coming in. >> other countries, it's hard to match the workforce distribution channels it's great to have you back and look forward to next time. thank you. >> great thanks for having me >> coming up on "techcheck," an exclusive with the ceo of unipath that starts in a few minutes as we are in the narrowest trading range for the s&p for the year so far. rest yo, and interests you pursue. plans for the long term,

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might be tepid moves for the broader market right now the s&p up 0.1%, but the meme stocks continue to see big moving we're just getting a check on some of those names. clover health right now is down about 6.5% gamestop is up about 2.5%. wendy's, amc, blackberry under

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the number one brand to support beautiful hair, glowing skin, and healthy nails. and introducing jelly beans with two times more biotin. federal authorities launching an investigation into the release of billionaire tax information. this following, of course, the pro pubbly ka report from yesterday. robert frank has the second day lead for us on that story. robert >> david, leaking tax information is, in fact, a crime since under federal law tax returns are confidential irs chief charles redick testifying yesterday before the senate saying, quote, i share concerns of every american for

the sensitive and private nature and confidential nature of the information the irs receives the investigation has been referred to the treasury inspector general, the irs inspector general and the fbi. the irs has systems for detecting unauthorized employee access for taxpayer information and has fired employees in the past for violating that policy an irs inspector general's report found some of the employees had been rehired and the system for protecting this data needs to be improved. it doesn't know who the anonymous source was for the material on thousands of wealthy taxpayers. material may have come from a hack of the irs. but many republicans now calling it an abuse of power and pushing back on biden's plan to better fund the irs and improve enforcement and expand its powers perhaps to see bank statements, payment services like venmo, those efforts and requests to get the irs those

more powers now under siege. back to you. >> interesting outcome of that story as well. thank you. robert frank. all right. just getting a check on the markets right now. we are fractionally higher the s&p up 0.1%. keep in mind we are in striking distance of a new all-time high for that average that's going to do it for "squawk on the street. "techcheck" starts now. zoo happy wednesday. welcome to "techcheck. i'm jon fortt with carl quintanilla and deirdre bosa today making sense of lucky clover, a break down of surges leading the spac charge. bitcoin is risky but official. the company he