we have the latest ahead it is friday, june 11th, 2021. "squawk box" begins right now. good morninge to "squawk bo cnbc i'm becky quick along with andrew ross sorkin joe is off today the dow is up 60 points. s&p indicated up 2 points. nasdaq is up under a point markets shrugging off the consumer price data yesterday. it wasn't just the stock market that shook things off. check out the treasury market. treasury yields actually dropping on the hotter than a anticipated news 10-year is lower today the yield is down lower today.

1.44%. yesterday, it was at the lowest level since march 3rd. in the face of higher consumer price, the treasury market not responding i don't know if that is bond traders not worrying or if the fed playing a role in the markets at this point. we will have a lot of discussions to talk about what this means and what the fed will do next. we have sara rascon. we get her ideas about whether she thinks inflation is transitory andrew said some of the meme stocks got rushed yesterday. game stock down 27% after two hires from amazon is announced it is developing hardware to hook up to the tvs to stream games from the cloud it is working with smart tv

makers to incorporate that you can see the stocks rebounding a bit it is up 6%. in the meantime, amc fell by 13% yesterday. there is cloverhealth which plunged by 15% it is up 55% this week also, clean energy fuels rallied more than 31% on wednesday tumbled by more than 15% yesterday. stocks up 2% today all of the stocks have been act active in the pre-market trading. markets have been flatter. down volume for the general markets as we get into a little bit of summer. let's look at the "squawk stack. things are popping up with the cpi. wti up to the highest level in

two and a half years this morning up $70.42 a barrel. and rbob gasoline. if you look at aaa, it is a gain of 48% from a year ago orange juice futures are up as well that's the longest streak since 2013 coffee is up .50%. it was flat yesterday. year to date it is up 26% what goes up, must come down lumber is unchanged. down 12.6% for the week. the third week in a row of declines we are still looking at 28% for the year, andrew >> i'm drinking my coffee. are you in the transitory camp or more in the permanent camp? >> i think there are two tracks. i don't know which one will be the more dominant.

there are certainly things that are transitory if you are looking at delays and shipping and other issues, that will work its way out. if you look at things, you know, where food prices have gone up, wages have gone up, that works in that is not transitory once wages go up and prices passed on to consumers and higher prices at the counter or pump or anywhere else. those don't wind back as quickly. if you raise prices because you are paying higher wages, that is not getting rolled back. >> the wage piece. i was looking at the airline piece. a lot of people trying to go out for the first time to get out of the house. i was thinking of the coffee piece. i'm drinking coffee. i think a lot of people drink coffee i think you read the story yesterday about starbucks. how the demand for things and just the supply chain issues that so many are having. >> it's going to be transitory for the issue. transitory doesn't mean a month

or two we are talking transitory with shortages for cars and things that happen with that at least the rest of the year and early next year. the fed is patient, but consumers may be less patient when you see the prices continue if you are waiting to buy a car because you are waiting for prices to come down, that is not happening soon because the chip shortage is not ending soon. >> the fed and congress and how much money the government may or may not spend. a group of ten democrats and senators reached agreement on infrastructure krysten sinema said the plan would be fully paid for and not include tax increases. details were not revealed. the plan costs $1.2 trillion over eight years that is below $1.7 trillion price tag that president biden had put in place other members of the bipartisan

group include bill cassidy and joe manchin and rob portman and mark warner. mitch mcconnell was briefed this week and is apparently open to the idea according to senator romney. it is unclear if the package is comprehensive enough to win support from the white house and democratic leaders in congress >> juggling this just about every day. i would say if there is a running line on this, i would love to see the vegas book ies. i think the odds change just about every day. >> just about as fast as this new car you are about to talk about. tesla started delivery of the model s plaid last night near the factory in freemont, california elon musk promised the car would be faster than porsche, but safer than volvo

it has acceleration from 0 to 60 miles an hour in under 2 seconds. production should be at 1,000 cars a weeext quarter. >> we have to show that electric car is the best car. hands down you know so, it's got to be clear man, this is just sustainable energy cars. safest cars and most kick-ass cars in every way. that's why we did the plaid. >> car's interior includes a steering yoke and entertainment display system for rear passengers emphasis on the rear passengers. you can't watch this in the front seat. >> if you are going that fast, you don't want to watch a monitor in the backseat. maybe the kids do. i think you are so excited to go that fast. you want to look out the window. >> 0 to 60 in 2 seconds is hard

to imagine it's a little crazy. >> you feel the gs on your body. it's real. by the way, what do you think of the yoke steering wheel? >> it is cool. >> they will put it in the suv version. i don't know i don't know how i feel. when you drive, do you drive with one hand and do the hand like this? >> sure. >> you can't do that with the y yoke >> hands on the wheel at all times? >> exactly exactly. meantime, chinese ride sharing giant didi going public in the united states it could reach valuation of $70 billion. no word on the exchange it will list, but it will use the symbol didi uber sold the ride sharing business to didi and now owns 13% of the shares.

softbank owns 21.5%. others include alibaba and tencent. if you are an uber shareholder, you are keeping eyes on the ipo. nat fascinating with softbank. some winners and maybe some losers we have not seen those yet they seem to be winning. when we come back, la lot more on "squawk box. can investors ignore meme stocks and apple hiring a executive at bmw who focused on electric cars this adding to speculation you can see what i'm talking about about the plans to compete with the likes of tesla. apple shares up largely on the news this morning. we will see if they can produce a car that goes 0 to 60 in 2 seconds like mr. musk. we're right back after this.

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welcome back to "squawk. i want to dive into the issue of the meme phenomenon. the trade spilling over to passive investing. joining us is stephanie link she is a cnbc contributor.

serat is a cnbc contributor as well stephanie, link up, and excuse the pun. somewhat intended and somewhat not. what are we seeing here in the way inn institutions should think about meme stocks and effecting the passive world? >> good morning, andrew. if your benchmark is not the russell 2000, you don't need to pay attention to these memes there is no one of the companie in the benchmark of s&p. here is the thing. the certain investor class involved in the names. retail, reddit could be hedge funds they're nimble they get in and out. they can day trade or embrace

the volatility and risk. inn institutions cannot get in and out of the names to me, i think this is a subset in the market. it is a very small group some of us don't have to pay attention to it. especially if there is no contagion in terms of when they're up, does it affect the market or when they're down, does it affect the other part of the market they don't you have liquidity sloshing around if you believe there is no inflation, that is a risk for risk assets. these are a risk on within risk assets sd s assets. >> sarat, you may think this is loony toons. is it possible the meme stock investors push the value of the stock and the business into some

of the other indexes over time >> i think, andrew, you are on something that we need to watch for and be careful a lot of the stocks as they have market caps from small and midcap and large cap, it is up to the large cap like stephanie said will the s&p say this meme stock has its own fundamentals to get into the s&p we have to watch that and as more reddit investors move into bigger market cap stocks folks like us need to watch and say are these companies that we're invest bing in, will theye in our index it is not something the s&p needs to watch it is etf and the russell 2000 and other indexes that other people benchmark in. this is where closet indexers have to be nimble.

all of this adds to the volume i think the question will be when liquidity is starting to be withdrawn, who is left and who will be holding stocks with the valuations don't make sense? >> steph, i know the valuations don't make sense when you think about the larger cap companies in your universe, do you think they can ever become meme stocks sarat said you have to think about other stocks are these stocks on the screen right now, amc and gamestop and clover health and wendy's now. we don't have bed, bath & beyond right now. the short interest or the size that makes them more attractive and can it be done at a larger scale company? >> i don't think that the reddit

traders are looking for quality or fundamentals on valuation they are looking for high short interest names the companies i traffic in in the sa&p 500, they have short interest nothing like 20% or 30% or 40% to start i think it would be hard for the reddit traders and retail who are playing, they are playing this game. it is hard to try to find those larger cap companies, frankly. >> sarat, there are a lot of reddit traders and others that are watching this morning who may very well be making money and saying what are you talking about? stop trying to protect us. stop it already. stop talking down to us. stop suggesting that we don't know what we're doing. we're actually quite sophisticated. looking at various flows and momentum pieces.

we're looking at the charts. what do you say to those people? >> i would say they will call in the suits. they know what they're doing they know what they're doing, no question we're not in that space. i'm not saying to them what you're doing is wrong, but what you are doing is more trading. it has more speculative fervor to it. i'm looking at themes three or five years out and companies compounding growth as long as they understand the risk mitigation when things go the other way and you get capital calls and margin calls you manage your risk they are looking for things. they are running screens like we do they are looking at fundamentals and short interest that is important. that is something that fuels the stock prices what they're doing is not wrong. they need to understand if we're wrong on a thesis and go long financials and rates keep on going down, we have to figure

out what we're doing just like what they're doing no way would i say they are wrong or not smart they are smart people. they mknow what they are doing it is a different type of making money. ours is more investing. >> final question to steph is it possible you can will it into being some people say what happened with tesla is will it into being. followed the story stock and they willed it into a fundamental investment >> oh, gosh. i just think that is dangerous, frankly. look, i agree with sarat these are smart traders. they are traders and they have their set of rules i don't want to will or hope when i'm investing i want to focus on fundamentals. >> thank you, everybody. still to come this morning, a big change could be coming for

television news and screaming era. tom rogers will join us to read the tea leaves and tell us what to expect. as we head to break, check out the moves in cybersecurity names this week. fireeye, z scaler and cyber arc up double digits we'll be right back. stick around >> announcer: what's working is sponsored by comcast business. bounce forward at comcastbusiness.com. 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. ♪♪ [sfx: revving trucks]

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welcome back television news is at a cross roads. the economics of the business is changing as more people cut the cord and pay for streaming our next guest sees hurdles for television news and a path

forward as he outlined in the op-ed. quality television news could be a cast ualty of the streaming wars tom rogers is the first president of nbc cable tom, my first question is what is different about television news we have seen this happen to so many industries along the way. >> of course, television news is very important programming nothing more important than business news, of course what happens in an era is entertainment goes to netflix and the other streaming services sports programming with espn plus with streaming rights in the future for professional sports amazon spending $10 billion for one night of nfl football. news gets vulnerable against what is going on in the industry to understand that, you have to understand the current economics of television news

cnbc, msnbc and cnn and fox news get fees from the cable and satellite operators today. they get paid fees across all of the cable and satellite homes. regardless if the homes watch the channels or any one of the channels as cord cutting continues, as you say, the subscription revenue becomes vulnerable the question is what happens to it we lost 20 million cable satellite homes. we are down to 75 million as cord cutting accelerates the issue is how does news channel substitute that revenue for other revenue? >> what is the answer? we have known this is coming is there a cliff this falls off

or if you are waiting for the syndicated fees, it is more of a cliff versus erosion >> it is getting scary as all of the screamintreaming services ce in the local markets, news is the core programming, they are getting paid fees across every cable and satellite home in the local market now, magazines and newspapers faced an economic crisis also. apple stepped in and created a bundle of magazines and newspapers you get 200 magazines for $9.99 a month. it hasn't been successful. i have grave doubts the news companies will trust the news product to apple which they have issues about in terms of what its competitive views may be then you have to think is there

somebody that might be a switzerland other than apple to create a news bundle any one channel would have to charge a lot of money to make up for the loss of subscription losses from cable and satellite. somebody stepping in to be a b bundler is a possibility cnbc is unique because it has so much by way of news that it may be able to create its own bundle with cnbc and msnbc and sky news and international service it has and news on peacock. possible a single bundle there it is interesting. the news channels have a degree of inter dependence. if they are not paid across all homes the way they have been, they probably want to get paid across all news homes. even homes consuming news where that particular channel is not consumed in that household that would give a broader footprint. that becomes an issue.

obviously politics here. >> tom, netflix and others, apple, have said we don't want to be in the news business in the streaming wars i think one of the things you are seeing, for example, warner, which is merging with discovery. it is possible that their over the top cnn service, ends up in the ultimate hbo max bundle. i think that could be into question maybe not the full products, but slightly different products because of the cable issues that we described in terms of what has to be offered over the contracts with the cable providers in that respect. is it possible that we see, actually, a lot of the streaming services just start to effectively put the news into their service? paramount plus take cbs news

product and plug it right in >> it is quite possible to do that the question you have to ask then are they getting incremental revenue when they put it into the bundle the streaming wars are competitive. price there as we talked about is hugely competitive. you could offer that programming in there, but that doesn't necessarily mean you get incremental revenue when you do it they have to make up for the subscriber fees they get from the cable and satellite world. the question is would they put it behind a pay wall of one of those services and say you get increment at news for additional fee and the question is any one incremental fee you charge, is that big enough to make up for all of the homes that get paid across the homes that never watch their channel? obviously, they are all looking at that equation it is a tough equation

>> ist is a tough equation. tom, i look forward to the conversation see you. >> thank you business news is the most important. >> from your lips. when we come back after this, we dig into china's crackdown on cryptocurrency. officials arrested more than 1,100 on suspicion of using crypto on scams. as we go to break, a look at yesterday's s&p 500 winners and losers when you buy this tea at walmart, walmart can buy more tea from milo's. milo's can create new jobs, jobs for people like james and lacey and me. me, i love my work family. family here and home, is my life. life is better for us because of a job.

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good morning welcome back to "squawk box. we've been watching futures on this friday morning. things are picking up momentum dow futures indicated up 105 points nasdaq in negative territory before the start of 6:00 a.m. and now up by close to 30 points the s&p 500 up by 8.

dow components are strong which are merck and boeing and verizon. you see merck up 1%. boeing u.60% verizon up .50%. apple and caterpillar are rounding out the top five in the dow gainers. andrew. the crackdown on crypto in china. police arrested more than 1,000 people suspected of using the cryptocurrency for money laundering joining us is bob hornblatt. former vice chairman at goldman sachs. bob, great to see you. i should mention and i believe this is true you were the first sherpa at the

first g7 meeting years ago >> that is true. the first six starting in france >> okay. you can provide a bit let's get to g7 in a moment. what do you think china is trying to do on the crypto front? we have lots of mixed messages there is, you know, a crackdown on mining on one side and peter thiel thinks china wants to push and support things like bitcoin and other cryptos as a way of punishing the u.s. dollar. what do you think? >> it is complicated i'm not sure what the chinese want themselves. i think the policy is in a period of evolution. the crackdown was an odd one they cracked down on a lot of companies and closed web sites they put a number of them back

up in a short period of time there were a couple of reasons behind it. the market had gotten frothy with a lot of speculation and charges of misuse are for movin money out of the country the chinese are concerned about large sums of money moving out of the country without government control or government notification a lot of people getting into this game who were not very experienced and causing buyers to buy things they were not familiar with. it pushed the prices up and made them more the volatile and made it harder for the chinese government and people's bank of china to recover money >> that's what i was going to ask. crypto, if it works the way it is supposed to, and many ways it is supposed to be decentralized. does that work in a country like china? >> you put your finger on it

they want two things we want to have a centralized system and they want to move ahead in crypto in part. you pointed this out a moment ago. they're concerned about the dominance of the dollar and the dominance of the dollar, in particular, as a use for leverage american leverage on china and on other countries they would like to find some way around the dollar both internally and asia and internationally. on the one hand, they want a certain amount of control over the currency and over currency movements and how people use it. they don't want a lot of speculation because then the market drops and people lose money and the government gets blamed >> let me ask you a national security question. you know, one of the things we have seen now and it has been a real switch in the last 12 months biden has revoked the trump era

e.o.s of tiktok and wechat over national security concerns the question to you, were they genuine national security concerns to begin with are they not how should they be viewed? what is your take? >> my take is this is a temporary move he has done two things one as you say, he revoked executive orders, but he has launched an investigation of the great money chinese software companies and companies in other countries as well. he is going to come up with criteria as to what he considers to be a threat to national security so, this is really in a curious way, narrowing it by eliminating the companies, but also likely at the end of the review, it will lead to a broadening of restrictions on a great many or

at least some additional companies that he thinks provide information to the government of china about americans providing information that the united states does not want china to have also, privacy issues that he is looking at it is a short-term narrowing, but long-term broadening sdpbroadening >> final question. if you were the sherpa on the g7 trip, i don't know if you whispered advice to the president back in the day. if you did for this trip, what would you tell him >> i would tell him you still have to deal with the pandemic with your allies that is important to make sure the u.s. is a leader and other countries as well. second, develop some degree of unity on how you deal with the pressures from russia with the cyber area and, three, try to narrow the differences with the

united states and europe on china. the u.s. takes a harder line on china. the europeans are in a trade war with china try to work that out also talk a little bit more as you like about climate there is a big climate meeting coming up. those are the major issues of course, it is traditionally an economic summit talk a little bit about inflation and are other countries seeing inflation and what we should do about it individually and collectively. >> inflation is the big debate we'll talk more about that later in the program good to see you. that's the thing maybe everybody has inflation. this is the mmt argument if everybody has the same problem, inflate ourselves out >> that's going to be something that they'll talk about. yellen talked about it i'm sure the summits have a tradition of talking about

economics and inflation will come up. they have to get some common point of view. >> have a great weekend, bob >> you, too. thanks for having me on the show >> becky. when we come back, stocks to watch in today's trading we talk dog food and pharmaceuticals after this not related. later, don't miss the interview with draftkings ceo jason robins as the in-person casinos reopen. t cc p ytn watch or listen live onhenbapanime. i member because i needed to consolidate my credit card debt. i needed just one simple way to pay it all off. it was an easy decision to apply with sofi loans, just based on the interest rate and how much i would be saving. there was only one that stood out and one that actually made sense and that was sofi personal loans. it felt so freeing. i felt like i was finally out of this neverending trap of interest and payments and debt. ♪♪

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time for the executive edge this morning we have stocks on the move to tell you about dave & buster's up sharply better than expected first quarter as revenue shot up 66% it is also facing margin pressures due to higher labor and other costs. i can tell you the sorkin boys want to go to dave & buster's. shares of chewy are lower this morning. the online retailer posted a

surprise first quarter propefitf 33%. that is up 32% from a year ago net sales per customer hit $388. that is up nearly 9% from a year ago. the company warning it is facing labor shortages and supply disruption which had it run out of items. and vertex pharmaceutical shares after halting of the experimental drug that helps the lungs and liver. it is a deficient protein that caused the disease, but not enough to help the patient that stock down 12%. when we come back, tesla taking the wraps off the model s plaid model last night we dig into the high-end model and what it means for the stock. that's next. >> announcer: don't forget to subscribe to our podcast

inte interviews, original content and behind the scenes access look for us on your favorite podcast and subscribe to "squawk pod" today >> announcer: executive edge is sponsored by at&t business other people and network will help keep you connected. let's take care of business. an . okay, imagine this... your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, asap! so basically i can pick the right plan for each employee... yeah i should've just led with that... with at&t business... you can pick the best plan for each employee and only pay for the features they need. wealth is breaking ground on your biggest project yet. worth is giving the people who build it a solid foundation. wealth is shutting down the office for mike's retirement party.

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joining us is the manager director. deliveries

collin, you are the most bullish. it's $1,00080. what are you thinking at this point? >> it's important to maintain the leadership from a technology leadership and the drive train as well as the product design. i think they demonstrated that well last night. our price target is really based on their ability to really deliver autonomous vehicles. what we saw last night is they're preparingfor a full economy in terms of the user experience within the vehicle. that's important to see them migrate towards that full autonomous experience inside the car between the back seats, the display and some of the other features within the display preparing for folks to not really have their hands on the wheel. >> it's a pretty car and it's pretty impressive the things they're saying it can do, going from 0 to 60 in under 2 seconds

and also comes with a pretty hifty price tag. we're talking about $120,000 and we're wondering what that means in terms of sales. is this something that's going to add to the bottom line or just about leadership? >> i think it's really about leadership and demonstrating support for the brand, the tesla brand. i think it's been really powerful for the company i they need to maintain that position you've seen any number of examples the company and leadership around the brand, excludes sift starts to fade a little bit. having a vehicle like this that folks can aspire to is important to maintain the quality and the excludes sift of that brand going forward. >> tesla shares were on fire last year. if you look at this year, they're down -- they're up about 15% year to date down 15% year to date which trails the s&p 500 and the dow if you're looking at just what's happened from the 52-week high,

they're off by 33% what happened? was this a stock that pulled a lot of performance forward what else is the street waiting to see >> we cover a lot of names on its face we saw an extraordinary run through the january to early february it retraced because the 10-year started to increase the yield. we went from 29% yield to 1.5, 1.6% you saw some of the growth retrace. i tonight think it's unusual and the climate retraced as well in that environment a big part of this is the market figuring out the relative valuation for growth in an environment where you have very affordable capital available i think we hit a digestion period for investors where they've kind of digested what's going on with the climate technologies as well as the covid environment and how we're going to move going forward. i think getting into the better

part of the summer and into the latter part of the year and we start to see the companies with the supply chain balance out and see who are those real leaders in the area. you start to see groefwth in stk appreciation for tesla, i think this is about the fun. you have to imagine the company is dominating the production side of things and leading the user experience, which at the heart of it is going to be the autonomous vehicle technology that they're bringing forward. >> collin at $1080, your price target is way, way above where it stands right now. if you think that that's still realistic for a price target, you must think there's still a lot of volatility that will come in this stock. >> absolutely. this group has been up, down and all around i've been doing this for over 13 years now and there's never been a straight line for anything within this sector so, you know, we do expect a fair amount of volatility. there's a lot of leap frogging

that's going to happen in terms of technology development. what we saw last night was that tesla has continued to push the envelope in terms of the technology and engineering and the motor that they've built, the integration of some of the features is pretty impressive at this point it's really something that no auto dealer can lay claim to we think this still continues to move forward and tesla engineering, while they burn up some folks, are making tremendous progress that a lot of folks are following at this point. these guys are leading the field by a substantial margin at this point. >> what's driving things right now? you mentioned the 10-year at one point. looking at this, it seems like it's hard to do fundamental analysis on this when you have such volatile moves and such huge swings. >> yeah. i was talking about the larger group around climate change and affordable capital driving the ten 10-year.

i think it's going to be incremental progress on the division deliveries are going to be an important step for everybody to make sure that they're on track. i think it's becoming less important what the actual number is as long as they're just making progress. the second thing is in our view, the introduction of improving driving functionality within the automatic system that becomes very important in full autonomy on these vehicles. >> collin, thanks for your time today. coming up when we return, dr. scott gottleib is going to join us on the delta variant getting more prevalent in new york plus, a third fda adviser retiring over the approval of biogen's alzheimer's drug. wealth tax showdown, anthony scaramucci is going to squar

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truly absorb the natural goodness. new chapter. wellness, well done. everyone, let's go for a little ride. ♪ hallelujah hallelujah ♪ ♪ hallelujah ♪ ♪ hallelujah ♪ ♪ hallelujah hallelujah ♪ ♪ hallelujah ♪ ♪ hallelujah ♪ ♪ hallelujah ♪ markets in focus after the

s&p shrugged off hotter than expected inflation numbers and closed at a new high we'll tell you what you need to watch in front of the open. new questions about vaccines and the growing debate over whether shots should be mandated states, businesses, schools all trying to figure it out. dr. scott gottleib joins us with the latest on the battle against covid. and the price of everything is going up. so how much more does that mean you're going to be spending in a single day we'll break it down as 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 joe is off today take a look at u.s. equity futures. we'll show you what's going on as we hope to close out the

week nasdaq up 33 points. the s&p 500 up a little over 9 points right now dow jones up 117 points. china's ride hailing firm didi has made the u.s.ipo filing public it doesn't reveal the source of the offering they raised around $10 billion it might be valued close to $100 billion. mean time, the bipartisanship group of senators said they've reached agreement on an infrastructure proposal that would not raise taxes sources say it spends $974 billion over five years and 1.2 trillion over eight years if it's extended that long. now it comes after president biden ended separate infrastructure talks with a different group of senate republicans. we'll see where that goes. two passengers aboard a

celebrity cruise ship have tested positive for covid-19 the line saying passengers were traveling together, have no symptoms and are being isolated. meantime, let's get over to dom chu. he's looking at this morning's biggest movers what's on the list >> we have interesting themes developing so far, andrew, becky, with regard to the week that's played outso far. we know the sa&p hit the 27th week high. growth versus value rotation over the year-to-date period we're close together in terms of performance for etfs attracting growth and large cap value side of things. it has been a widening gap since then if you take a look here, you've noticed that there's been a bit of an underperformance in the orange line value stocks and more outperformance in the white line which is the growth stock side of things that's narrowing a little bit

more here. we'll see if that kind of value trade perhaps is over or is maybe taking a pause for right now. also taking a look at the week to date stats with regards to the sectors performing best. health care and real estate, they're by the way two of the best performing sectors on a week basis the worst performing stock on a year to date basis year to date it's solid overall. the meme stocks to watch because we have seen a marked pull back over the week and a very volatile trade clover health is a big outperformer up 59%. you can see there just in the last couple of days a big underperformance there amc and gamestop, volatile, yes, but compared to what's happening with clover, not as much amc as of yesterday's close still, andrew, becky, down about 40% from the record high that it hit just on june 2nd giving you an idea just how crazy volatile some ofthese meme stocks have

been >> dom, i know it wasn't just on your list but we were showing this in the 6:00 hour, wendy's i'm fascinated by wendy's. that stock doesn't have the kind of short interest that some of the others do. i've always wondered why that's sort of emerged. do you have a view >> i don't know why -- you're right. i don't know why that has emerged as one of the topics you never know with regard to this wall street bets reddit crowd what will set people off, what will trigger people to say, hey, this is a great thing to go after. i would note there's a great story on cnbc.com now on the cnbc pro side of things which is our pay wall premium product, andrew analysts at bank of america have put out a list of what the new meme stocks could be many of them like workforce group and others have high short interests but there are a number of names out there where the short interest is substantial, say, 7, 8, 10, 12% but nowhere near the levels we've seen for the likes of gamestop, amc or

others so maybe wendy's is just one of those names that is a popular brand name i keep thinking of bed, bath and beyond, why would you go after that there is short interest there. the more people you get to coalesce around a name, the more you can have power over its trading and it's easier to do that, andrew, i think, with brand names. names people know. >> hey, dom, just looking at the futures this morning the dow keeps picking up steam the others do too. dow up by 115, 120 points above fair value any idea what's happening there? anything that can explain it i didn't see any movers. >> no. with the dow outperformance we are seeing a little bit of that move there let's put it in perspective. 115 points is substantial. nowhere near the 150 points it was when the dow was at 20,000, 15,000 if you take a look at the way the markets have performed over the course of the last week there has been an interesting move in that there has been no

real activity, right it's trading in such a narrow band it's almost as though traders will wait on data to show them one way or the other which way they wanted to go. there's nothing that happened. the curious part is just how much the inflation data did not affect what happened with the markets overall. still record high for the s&p, becky. i think you were as amazed as i was looking at the closing bell yesterday and saying how could you see interest rates falling below 1.5% and then markets rising all-time highs despite what could be considered three months worth of inflation data that suggest things may not be as percy going forward. >> the only thing that leads us to is market in absolute belief that the fed is not going to move quickly on any of this. that's the only thing that explains 27 close higher for the s&p 500 just for this year. >> becky, i have heard some

talking about. that's the next catchup trade. you have record highs and the small caps still have not gotten to that point yet. the next leg of the reopening trade is that russell 2000 i would say the last couple of days we've seen some eakness. >> dom, thank you. in the meantime, tesla began

deliveries of the model s plaid ceo elon musk said the car would be faster than porsche and safer than volvo he bragged that it delivers acceleration from 0 to 60 miles an hour inunder 2 seconds. he said production should be at 1,000 cars a week starting next quarter. >> i'm going to show that an electric car is the best car hands down, you know so it's got to be clear. it's like, man, this is sustainable energy cars. can be the the most kickass car every way. that's why we did the plaid. it includes a steering yolk instead of a traditional steering wheel, entertainment display system but only for the

rear passengers, not for those driving. >> asaid, that's going fast. apple may be trying to do what tesla is doing they've hired a former executive from bmw it's adding so much speculation about the tech giant's plan to compete with the likes of tesla. we'll come right back after this a lot more coming up on "squawk box. get ready for it all with an advanced network and managed services from comcast business. and get cybersecurity solutions that let you see everything on your network. plus an expert team looking ahead 24/7 to help prevent threats. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities.

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when we come back, inflation nation the price of your daily breakfast and a breakdown. how much more you're paying to start your day compared to last year you've got to hear this straight ahead. then the ceo of draftkings in how the reopening is affecting the online bidding market "squawk" returns right after this time now for today's aflac trivia question. this popular internet term comes from the greek word mimena, which means something imitated x"onbc "ua when cn'ssqwk bo ctinues aflac! what a day of upsets. ha ha. jill is certainly upset with that unexpected bill from her back surgery.

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to plan your escape with expedia. expedia. it matters who you travel with now the answer to today's aflac trivia question. this popular internet term comes

from the greek word mimena, which means something imitated the answer, meme the term was coined in 1976 by british evolutionary biologist richard dawkins in his book "the selfish gene." the cdc's going to be holding an emergency meeting next week to talk about higher than expected cases of heart inflammation in 16 to 24-year-olds following doses of pfizer and moderna vaccines. scientists had been expecting between 10 and 102 cases of the rare disease and so far have received 275 joining us right now is dr. scott gottleib former fda commissioner and cnbc contributor. he serves on the boards of both pfizer and i will lumen na his new book called "uncontrolled spread, why covid-19 crushed us and how we can defeat the next pandemic" is

out in december. this is a concerning report. what do you think of it? >> it's definitely a signal. it needs to be investigated by the fda and cdc. at this point there does seem to be a clustering of cases about 8.8% of all people who received the vaccine are those ages the reports have been in that age group. most of the cases are mild and self-limiting. they've been treated with nsaids a handful of people have gotten more seriously ill and been hospitalized with the condition but it needs to be looked at the question is what could be the connection between the vaccine and these observations is the vaccine creating some kind of inflammatory state that is then leading to this inflammation if so, what is the approach going to be? i think at this point the risk-benefit still favors vaccination certainly in this age group.

that's what cdc and fda have affirmed if you find a link between the vac seen and these cases of heart inflammation, it could open cases do you formulate the vaccine at lower dose which is already being done for younger patients you want to get to the bottom so you come up with an approach that mitt at this gates this there is a preponderance in men versus women it's about 80/20 in favor of men. 80% of the cases have been in young men versus young women that's another observation that we need to take into consideration. >> i mean, with some of the other problems we've seen in clotting, it was women who were really facing the higher number of hurdles i think that was with the j&j and some of the other vaccines that are based on that same adenovirus what does that tell you? is this something that could be related to having the disease itself i mean, only because it was men who had more problems with

coming down with covid. >> yeah, look, we see per pericarditis more in men than women. there could be other spread ever viruses that cause pericarditis. more younger americans were getting vaccinated, they were going out and about and getting more common virus and we happen to have a preponderance of it. that's one popbility possibility. you need to say there is a causality until you can prove otherwise. with the cases we saw with the j&j and astrazeneca vaccine, that was what we believed to be an autoimmune effect the vaccine was triggering an immune remediated reaction we believe it was the viral vector that was being used to

deliver the gene construct in the vaccine. basically the vaccine construct in that case in this case, these cases of pericarditis, we don't know what the reason is. is it immune remediated or is it a general inflammatory cost. we know the vaccine induces it that's why you get fever, injection site pain because you're getting your immune system stimulated. so is this a more generalized inflammatory response from the vaccine that's localizing in the heart in some patients is it something more direct with a vaccine that's triggering some kind of very targeted immune reaction that's manifesting in this way we don't have the answer to these questions. these are still low numbers. even people who speculate there must be more cases and we're recognizing a small number of cases, that may be true. there may be mild cases of pericarditis we are capturing most of the severe cases we do a pretty good job of capturing what are likely severe

events people who are getting very sick or might be hospitalized when you look at the number of people who are having severe cases of pericarditis, it's very severe most are mild cases that are being picked up some incidentally. >> what does pericarditis feel like how would you know if you've gotten a vaccine what would it feel like? >> yeah, a mild case is typically going to present with some chest pain, persistent chest pain that's positional it feels worse when you lean back versus lean forward it's positional chest pain that's not reproducible. you can't reproduce it by rubbing your chest if someone has persistent chest pain, they shouldn't have it at that age, it changes its intensity as you move around, that's an indication of pericarditis you want to present to your doctor if you have those symptoms it will present with cardiovascular manifestations. you might develop restriction

around the heart's outflow that's going to manifest with the kind of signs and symptoms of heart failure those are severe cases in this cohort that cdc and fda are examining. most people are presenting with the milder symptoms. >> hey, dr. gottleib, wanted to ask you about another piece of news in the headlines. i don't know if you saw this royal caribbean has a cruise, one of their celebrity millennium cruises two people have been found to have covid i believe it's asymptomatic at the moment, but i'm curious if you were advising them or frankly people about thinking about taking a cruise, how you should think about it. >> well, look, i have advised, not them but the cruise industry generally. i co-chaired the healthy sail panel. we came up with 73 recommendations that we felt the industry should adopt to try to

create a safer environment on the ships, including very aggressive use of testing. those recommendations were made available publicly and the cdc had the chance to evaluate those recommendations. i've advised norwegian more directly i think the cruise line should be requiring vaccinations on each ship. norwegian is doing that. i think they should try to achieve 100% vaccination on passengers and crew. trying to create a protective bubble around that experience for the time being until we get a better handle on what the epidemiology of coronavirus is those environments are inherently -- they have certain risks associated with them a lot of people confined in small spaces i think they can be lower risk environments because you have the ability to control the environments by testing people as they get on the ship, off the ship, while they're on the ship. you have the ability to require vaccination in those settings. i think this could be a very

safe environment, potentially a safer way to go to london or another city they should require vaccination. >> similarly, i don't know if you saw this headline, but that bitcoin conference down in miami that we covered last week, a number of people are now coming down with covid. again, i think it gets to this issue of should you be attending business conferences on one end or as you said, going on a cruise on the other end? and how to think about that. that event was not a masked event. if you are going to be indoors at a conference, would you wear a mask today if you were -- if you had the vaccine, if you didn't have the vaccine? how should you run this? >> well, bitcoin conference is a select group of people who haven't been vaccinated and a younger population i don't know if we should draw

conclusions from that one conference i believe what's going to happen going forward is the construct of conferences is going to be different. you'll have a bespoke event. maybe your higher value clients will be coming to the on site portion of the event the rest of the event will be streamed for a broader audience. i don't think the idea of trying to pack 5,000 people into a conference room and trying to get as large of a crowd as possible is the structure that a lot of businesses are going to take in terms of how they approach gatherers in conferences. they'll have one more bespoke and one bigger online for a general audience offer a little bit different programming as well. i think we're going to think differently how we do this heading into the fall and winter. >> if you're fully vaccinated, now fallon and colbert are putting people in the audience, no masks, the idea is that

everybody is vaccinated. do you feel comfortable going to an event like that >> look, i have. i mean, i've been at some smaller conferences. again, the kind of conferences that i've described here, more bespoke events where there's been hundreds of people, thousands of people. i have been unmasked in those environments people do come up to me in those environments i do feel comfortable especially being vaccinated in a low prevalence environment will i feel comfortable in december and there's a broad outbreak i might feel different your risk is tied not just to vaccination but also prevalence of infection prevalence is very low right now i feel comfortable in that kaine of environment. i think these conferences should be requiring vaccinated. these have been vaccinated crowds i don't know a bitcoin conference had a high prevalence of vaccination in that crowd, just surmising.

>> dr. gottleib. great to see you thank you. >> thanks a lot. meantime, some stocks to watch this morning zoom being named a topic at rbc. joining us is the analyst with that you like zoom and this is a company that obviously was on a tear stock goati getting down to 40%e high in the post pandemic world. a lot of people have questions about it you think this has a very big future >> i do. thank you so much for having me. you're absolutely right. ever since we got the initial promising news about the vaccine stocks off about 40% it is about it what is zoom going to be doing in a post pandemic future. my take is i think this has created a big buying opportunity mainly because i think we are heading to a hybrid work future and you cannot have hybrid work without video conferencing networks i think zoom has advantages in its technology versus the others like microsoft and google and

really these are lasting for zoom hybrid work is a harder problem to solve than all of us being at home i think these are going to be lasting tailwinds from zoom especially as they expand from being just a networking platform. you mentioned google, obviously skype, we saw apple in terms of their face time product get a little bit closer to what zoom looks like today. don't you think there's going to be, i imagine, increased competition, or do you think people and companies are going to have to subscribe to multiple services that's the other thing we've seen happen over the last year then there's i think a separate issue which is what you mentioned at the end there, which is does zoom get into other businesses you know, do they start creating a product that looks a little bit more like slack?

>> yeah, absolutely. i'll take those in order on the first one, you know, there absolutely is increased competition. i will say i've used all of the major video conferencing vendors out there. zoom has the best ease of use, most reliable, most scaleable. i think those advantages are going to protect it. i think this will include microsoft, they'll have a place because they're microsoft, but i think all the other video conferencing solutions will have their marked share get conferenced away i think we'll see another replacement cycle as we get offices reopening and companies think about ripping out hardware meeting rooms and replacing them with zooms that is going to help them in a post pandemic world and reopenings that's important when we think about the other areas that you get into, i think real-time messaging is absolutely front and center.

there have been worries and that's the less important. it's a very natural orientation. chat is moved into zoom. it's a matter of technological innovation and product development. so i think that makes sense. have early success with zoom phone. cloud based telephony service. so these are all areas i see. >> thank you for hopping on at last minute here with this news this morning of that position you're taking. appreciate it. >> thank you >> have a great weekend. still to come this morning, prop propublica's report igniting a debate on loopholes for the wealthy. we'll talk more about it with anthony scaramucci and alexis goldstein. that's next. you're watching "squawk box" and this is cnbc tomers — they get our best deals. you got your existing customers — they also get our best deals.

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welcome back to "squawk box" this morning the billionaires in the propublica report didn't use complicated strategies to shrink their tax bills. for the most part they used

plain vanilla with a look at why any fix, quote, unquote, won't really be that easy a fix. robert >> good morning, andrew. well, it is being called billionaire tax avoidance, but provisions allow jeff bezos, elon musk, warren buffett and others to pay zero taxes in certain years are used by millions of other americans. first ist losses propublica article revealing jeff bezos paid zero federal income taxes in years. that's because his investment income or income was offset by losses day traders, everyday investors, people with retirement accounts all use capital losses to offset investment games and dividends next up is borrowing carl icahn generated assets with loans. 2/3 do the same thing by borrowing against their home with a mortgage. you have warren buffett and

michael bloomberg. they're offsetting. what your' saying is we have

a cap but that doesn't get at the heart of the headline issue here which is that these are wealthy people who generate little income relative to the wealth and, therefore, don't pay any or very little income tax. so even if you've got, let's say, rid of that deduction for billionaires or you stepped it up to let's say nothing over $1 million is allowed in interest expense, that wouldn't solve the problem. yes, it's an added benefit of being able to borrow against the stock. the premise is these are wealthy people not paying taxes on the wealth getting rid of that deduction or lowering the bar doesn't deal with that. >> this goes to the issue of whether you want a wealth tax or as you know i talk a lot about the idea of simply creating a stepup or eliminating the step up in basis issue at death on the estate tax

i have a view which i've said aloud many times, a lifetime is enough not to pay taxes and i recognize that there are farms and other family businesses that would perhaps get injured by that but at some point you have to pay. >> yeah. >> what's happening now is we've created a system where putting aside the income tax issue that this propublica piece is about, it all intersects. if none of the wealth is ever taxed, that's an issue now we could argue that a lot of that wealth is being given to philanthropy, but typically, again, that wealth never taxed either because so much of that is stock that's given to the charity and, again, no taxes paid so i think there's a question mark -- >> right. >> -- about how to handle all of that >> i agree with you 100% on step up in basis. that doesn't change the headline and what shocked people about this article, which is that jeff bezos, elon musk, michael bloomberg paid zero income taxes

for certain years. step up, which i agree is a bizarre feature of the tax code that needs to be changed, would not change that. >> hey, robert, let's just go back to something you mentioned. you said that charitable giving took a hit when we restructured the way we do things and waives the personal deduction you get, the automatic personal deduction. >> right. >> i think the world of charity -- the charitable world is in for some change. what happened with that change alone? >> so what they did because they raised the standard deduction to double it to $24,000, a lot of families that didn't make sense for them to actually file deducted tax return and, therefore, declare charitable deduction. it doesn't mean they gave less to charity, although they did slightly, it meant they could no longer use that deduction because they're using the umbrella overall standard deduction of $24,000 which benefitted many lower income and middle income households

it meant that number of de deductors was felt by 1/3. so not for profits, you're absolutely right, were screaming about that they would like that changed again, it's hard to do because so many people did benefit from a higher standard deduction. >> robert, one final point and you may disagree with me the reason why the step up in basis would change this dynamic, at least in my mind, is because without that -- by eliminating the step up in basis, it effectively eliminates also the incentive to take out loans against your stock because the current view is i have so much money, i will just take out loans against the stock effectively till i die, right? if that incentive doesn't exist, you won't do it. you also wouldn't have the deduction that you'd be able to take on an analyzed basis you would be more likely to sell

some stock occasionally to create effectively income. >> i think a lot of the reason that elon musk -- yeah, elon musk, jeff bezos -- jeff bezos just sold 6 billion in stock elon musk doesn't sell stock because he believes in his company. optically that's really important to signal to his investors. i don't agree with you that if you got rid of step up elon musk would be elg stock i think he would worry about that for his heirs he is all in on this company and -- >> that may be. >> -- he wants to show people. >> by the way, look, we've got to go because we're going to continue this tax debate after the break so let me send it back to becky robert, have a great weekend >> you too. when we come back, some increased demand along with supply issues are pushing prices of everything from eggs to gas to dog food. all at the levels we haven't seen since 2008. we've got a breakdown of how much more you are paying each day. that's next. and then the hybrid model

and its impact of finding new talent, especially in silicon valley we'll break down the post pandemic work environment in a bit. a reminder for you, you can always watch us live on the go "squawk box" will be right back. wondering what actually goes into your multivitamin? at new chapter, its' innovation, organic ingredients, and fermentation. fermentation? yes. formulated to help you body really truly absorb the natural goodness. new chapter. wellness, well done. (vo) this is more than just a building. it's an ai-powered investment firm with billion-dollar views. a cutting-edge data-security enterprise. yes, with a slide. a perfect location for the world's first one-hour delivery. an inspiration for the next workout cult. and enough space for a pecan-based nutrition bar empire. it could happen. this is where dreams become brick and mortar. find yours, on loopnet.

from wall street to main street to washington, everyone is talking about inflation, which is having a real life impact on all of our wallets right now. kristina partsanevelis has more on that front. it's costing more to go about your daily routine. >> which is why i'm here we know increased demand are pushing up prices to levels we haven't seen since 2008. in order to prepare you for any sticker shock, let's break down what maybe an average day would mean and what it would mean for your wallet. you walk over to your favorite coffee shop and latte. skip out on the average pumps of sugar and oatmeal. it's $4.85

up 8%. orange juice is up 21% due to tighter supplies in the united states and mexico. your significant other is a milk drinker so you grab that which is up almost 5% this year. after you drop off your groceries, you start searching for flights to las vegas you want to gamble some of your dogecoin wins. according to hopper, domestic airfare prices are expected to rise 16% heading into the summer peaking in late june you're thankful you can walk the vegas strip by foot because rental car prices are 95% from the start of the year to average $99 a day. you're frustrated with the prices so you call your good old friend gregory daco from oxford economics and ask if inflation is going to be a problem going forward. >> inflation is a feature of this recovery, not a bug essentially it reflects this imbalance between this very strong demand from consumers and businesses and a gradually

responding supply to that very strong demand. as there is this mismatch between very strong demand and gradually accelerating supply, there are pockets of price pressures. >> you realize companies have to pass on some of those higher costs but you hope these increases are only a temporary by-product of the pandemic or transitory like the economists and fed like to say or else you'll have no savings left to gamble away once you hit sin city >> christina, your average day sounds a little more exciting than my average day. seriously, going around finding things, have there been areas where you have noticed it more than others? >> i think in terms of the meat prices, especially bacon bacon being up 13% compared to last year. you're seeing fish prices, almost 2% higher but this seems like a lot of people are going with the notion that this is not going to last forever. it's just because of a lot of pent-up demand from the pandemic, however, you have

campbell's, starbucks, so many others, smucker's talking about price increases in the coming months how often do companies increase their prices and then decrease them not very often. >> chipotle, too. >> exactly. >> we talked about that. great to see you. >> nice to see you too. when we come back, how the tech work force is being impacted by a hybrid work model. later, draftkings ceo jason robins will join us to talk about theon line sports industry as people are being allowed back in then we'll get toni asconoggi's take

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as silicon valley solve the hybrid work models, firms have ramped up diversity, equity but how will remote work affect

that joining us to talk about the tech work forces and how they might be affected. joining us is shelly archambault. shelly, thanks for being here today. good to see you. >> thanks very much, becky thanks for having me >> let's just figure out the workplace landscape right now. it seems that most people think that workers have the upper hand right now. do you think that's the case >> i do. now that we're looking at remote work and hybrid work, employees get the opportunity to choose. before they were limited by their geography on where they can work and now that's being lifted >> with that change we are seeing some workers who want to work from home i think recent studies i've seen suggest more women who have children who are school age would be the ones who would like to stay home at this point, more than men, maybe by 50% more. is that what you've seen as well

>> i'm definitely seeing more women and frankly younger parents, right, in general would prefer that flexibility. frankly, becky, studies have shown that upwards of 59% of people want flexibility to work from home. so this isn't just a female issue. >> and the reason i ask is because i've also seen studies that suggest people who stay home who aren't in the office every day are less likely to get raises they're less likely to be promoted i wonder if that's going to have an impact on some of these diversity initiatives we've seen to this point? >> that's a really good point. there's been a number of studies, you're right. stanford put one out prepandemic. while people who work from home are 13% more productive didn't get raises and mit research has backed that up with the same thing. you're absolutely right. however, the onus is going to come to the employees and employers. employers have to be more intentional and employees have to be more assertive so as it relates to diversity specifically, i think this new

hybrid remote work will enable companies frankly to hire more diverse people because they'll have the limits of geography lifted 75% of venture capital goes to just three states. well, there's more talent beyond just three states. now they can go and attract that talent the key is going to be in retaining that talent and making sure that they've got programs that drive employee engagement so people feel they belong and are part of the broader organization. >> you're a board member on four corporate boards what do those companies think? are they changing the way they're going to be doing business are they going to be looking at things and say it's okay to work from home? we acknowledge and accept that and we are willing to pay those people and promote those people? >> the companies that i'm involved with are, yes, definitely accepting of this hybrid model however, i'll tell you creating a hybrid model is just a matter of saying, okay, you can work wherever you want to work i think everybody needs to be a

bit more intentional because if you come into the office one or two days a week but nobody that you actually work with on your team is there, then you miss the whole value of collaboration and innovation of coming together. companies need to think a bit more strategically about how they're doing this how do you arrange it so that people who work together in teams are there at the same time so that you can get the advantage of actually being in location this concept of office and office space is going to change. before it used to be where you come to do work. in the future with the hybrid model it needs to be where you come to innovate, create and collaborate. >> can you though sort of opine on what seems to me to be a remarkable gulf between sort of east coast thinking and west coast thinking on the east coast even though i know there are some companies talking about a hybrid model, i would bet you good money by labor day if not christmas of

this year five days a week will become the norm. that's just -- you can feel it you can feel it on wall street you can feel it even inside some of the other companies that really believe that being in the office matters to the culture. on the west coast there seems to be a very different view what do you think has created those two different views? who is ultimately going to be right? >> that's the million dollar question one of the reasons i think you see different views is frankly how adaptable and embracing people are of technology a lot of companies in silicon valley from the ground up had actually implemented technology to help with remote work, to help with distributed work forces because even prior to covid in the valley and in places where you have high concentration of traffic, et cetera, where technology is strong, people were still working more flexibly. therefore, adapting this model is a bit easier. a number of companies from ground up have developed the systems and tools so they don't

actually need that physical office so you see a bit more comfort with that overall environment. i'm not going to take that bet that come september you're going to see everybody in the office every single day of the week i do believe we're going to see a mixture of people who need to be at work and want to be in the office frankly, those who want the flexibility. studies show you're more productive at home. >> shelly, great talking to you. thanks for taking the time today. >> thanks very much for having me >> okay. coming up when we return, another big hour ahead inflation is hot, but will it affect fed policy? we're going to talk more about what it means for markets and if it's here to stay. we'll do that next don't miss our exclusive interview with draftkings ceo jason robins what does it mn eaas in person casinos reopen we're back after this.

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good morning futures in the green ahead of the friday open. investors didn't seem to care too much about yesterday's hot inflation data and the s&p 500 and nasdaq are on pace to continue multi-week winning streaks. we're going to dig deep into the

inflation this hour, including a question, is what we're seeing transitory or not? meanwhile, tesla goes plaid. elon musk unveils a kickass ev no, we don't have new video of him dancing on stage. can online gambling companies sustain their monster returns from last year as americans head back inside physical casinos the ceo of draftkings will join us and we bet he's got some good answers to that question final hour of "squawk box" begins right now good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick along with andrew ross sorkin joe is out this week

let's take a look at u.s. equity futures at this hour you'll see some green arrows by the way, these green arrows improved for a while we were looking at the dow up better than triple digits. the dow is up by 86 points s&p futures up by 6. nasdaq up by 15. if you're watching the treasury market, by the way, i should mention the s&p set another new high yesterday the 27th of a year and it came despite the higher cpi data. higher inflation not a real concern for the treasury market at least if you believe the traders are the ones moving things and not the fed 10-year note is at 1.448%. already yesterday it was at the lowest level we had seen since march. going lower even than that this morning. check out some of the so-called meme stocks popular with traders on reddit gamestop was down by 27% amc shed 13% now negative for the week. clover health which went public

lost 15% it was wednesday's darling clean energy fuels dropped 15% yesterday. check it out all those stocks are higher this morning. amc is the big jest gainer up 5.5%. yes, it is a bipartisan group of senators say they've reached an agreement on an infrastructure proposal that would not raise taxes specific details weren't revealed but sources telling us it spends $974 billion over five years and then 1.2 trillion over eight years if it's extended that long. coming after president biden ended separate infrastructure talks with a different group of senate republicans. meantime, tesla rolling out the company's latest car a high performance model s plaid edition. this car will sell for just under $130,000 tesla claims it can go from 0 to 60 in 1.99 seconds under 2 seconds. ceo elon musk officially

unveiling the plaid last night at an event in tesla's factory in california. >> we've got to show the electric car is the best car hands down so it's got to be clear. it's like, man, this is sustainable energy cars can be the fastest cars, be the safest cars going to be the most kickass cars in every way. that's why we did the plaid. >> and take a look at shares of tesla this morning separately goldman sachs is now reiterating its buy rating on the stock. we're going to talk more about the plaid with an analyst who feels differently. bernstein's toni sagonachi possible news on maybe a tesla competitor we'll see. apple may have further tipped its hand about its intentions to produce an electric car.

hired a former senior bmw executive who focused on evs this was the another company working on electric cars. it's got a lot of people raising their eyebrows andabt what appl next meantime, almost exactly 24 hours ago we got new cpi data from the labor department. it showed consumer prices accelerating at the fastest pace in a decade. investors shrugging this off government bond yields it is the trillion bazillion dollar question. is the market too confident? a man with the answer, steve liesman joins us now steve, what do you think >> good morning, andrew. the idea that the surge in inflation is going to be temporary looks to be conventional wisdom now if you watch the markets. that could well turn out to be right. but with stocks at record highs, bond yields and the 10-year

retreating below 150, markets have gone from inflation panic to inflation serenity. not everyone is convinced the price is right joel naroff said businesses haven't had this kind of pricing power in decades, and they will get used to it businesses have increased costs from labor and supplies and they plan to pass them along to consumers. the danger, inflation before prices begin to ease with these price increases, a person is $50,000 worse off than they were a year ago how does that help the economy ryding thinks the fed should be in the process of tearing back its assets they think the fed is going to start talking about tapering this june as a way to counter the development of inflationary psychology he doesn't think it accelerates the taper process but that is a risk the market faces, at least

as the numbers continue for several more months. here's the deal, as it stands now strong growth in the second and third quarter pretty baked in the real risk to the economy later this year, early next when the fed could be taking stimulus away as fiscal stimulus runs out and then we'll see at that point, andrew, if inflation is or is not a problem. >> here's the thing i'm trying to figure out. how does inflation factor in overseas especially as president biden is on the g7 meeting where this issue is going to be front and center i imagine >> yeah. i think there's two ways that what's happening overseas is going to affect u.s. inflation take, for example, europe which seems to be coming back. that's going to create more global demand for the same things american consumers are purchasing but also provide additional supply assuming that their whole supply chain is not

working. there's another way it's interesting. u.s. oil production is down a million or so barrels a day from where it was previously. opec also is below where it was before the pandemic. if that comes back, that could ease it from energy. if it doesn't, u.s. oil production comes back, you could have a persistent energy problem. that's one of the x factors to the inflation being temporary or permanent. >> steve liesman, thank you. appreciate it. joining us now to talk more about inflation and whether the rise we've seen is temporary or not is sarah bloom ras kin she's a former deputy treasury secretary. also a former federal reserve governor also a distinguished fellow at duke university school of law and cnbc contributor sarah, what do you think i like what steve just used, inflation serenity is that how you see things right

now or are you a little more concerned? >> well, let me tell you, the fed certainly does not seem to be super concerned, right? because what we have seen is real price pressure, right there's price pressure in terms of cars, particularly used cars. there's price pressure in terms of used cars there are areas that are really pushing the inflation numbers up higher than anybody, i would say, expected. that said, you see the fed really holding firm, really trying to see through this increase as transitory some are saying welcome like they're happy to be seeing this increase so the fed is looking through it and looking right past it. and right now it appears as if markets are doing the same as steve pointed out, the

10-year treasuries did not react particularly strongly to the cpi news and at the same time you are seeing the fed starting to talk about a little bit of movement away from the extraordinary measures put in place during the pandemic. >> you know, just the inflationary picture, it's something that everybody is noticing these days. paying more at the gas pump, paying more at the grocery store, paying more if you go to a restaurant there are a lot of different factors. some may fadeaway, some may not. even things like looking at car prices if you are waiting to buy a new or used car, you'll have to wait a very long time to see if the prices actually come back down, if they ever do. i know it was caused by the global chip shortage but once prices remain elevated, let's say for another six months or beyond, do you think that those prices will eventually come back down to earth? same thing with grocery prices >> yeah. i think it's going to be like

product byproduct. it's going to depend on the stickiness in demand on higher prices, whether in fact that demand stays high, whether the supply stays limited those kind of forces will ultimately determine whether the price is going to be transitory or whether it will stick if it does stick, of course, that's going to pinch. there will be a pinch. that will be something that moves us into a place that is harder for many american families. >> i know it's a weird question and almost an impossible question to answer, but what's temporary? if we're still looking at price increases 8, 10 months down the road, do we still say, don't worry, it's temporary? >> great question and it's not been defined certainly not a technical term so the term has been used,

temporary, transitory, fleeting. it is hard to know exactly what speakers have in mind when they use the term i will say that we will get an indication next week when the federal open market committee puts out after their meeting, they'll put out their statement of economic projection so we will have a sense as to the extent to which they view this transitory nature of price increases because they're going to project when they start to think interest rates the fed funds rate will need to rise start to think movement in terms of their view. >> here's another impossible question but i'll throw it at you anyway one of the biggest factors is going to be what the foreign demand is for treasury bills, right? the fed is the biggest player right now. it's hard to see any bond vigilantes coming back any time soon or being able to put up enough of a protest to make a

dent in things the biggest question has to be what happens to the overseas buyers >> that is right so there is -- when you look at prices, particularly of t bills and t bonds and all securities, it is a function really of not nearly domestic demand but essentially, as you point out, foreign demand so that factor is going to be critically important in determining where prices go. but that's always the case you know, that is always the case. >> sure. >> yeah. >> how much of a factor does that play into the room when the federal reserve sits around talking about these things, the fmoc >> typically the discussion will look at any kind of unusual, adverse or unexpected factors that could be in play. for example, when you look at car prices right now, we see as you pointed out, the semiconductor bottleneck

that is actually causing to a large extent the prices of cars to be higher than normal so the fed will look to particular one offs, particular factors that might be shaping demand in your question or supply in all questions. >> sarah, just you personally, what would be a red flag that you would say, wait a second, this may not be as temporary as we thought is it wage inflation is that a good thing as some people have said what other sort of signals would you sayok we need to reconsider this a little? >> yeah. it's a great question and it will vary based on who you talk to what i look to is i really look to the necessities, the people -- you know, that people are really needing i would be looking at housing prices i would be translating housing

prices into monthly payments so for people who rent, what kind of burden they are feeling i'd be looking at food prices. all sorts of food prices and of course gas prices. so the things that really pinch i'd be looking to. i would want to be seeing those accelerated. i look at the wage side. so to the extent these price increases are going to be pushed into higher wages, higher wages are long overdue in many sectors, right that is, as you say, a welcomed thing but it's also something that will eventually, if it's, you know, sustained and broad-based and done in absolutely every sector, you know, could have some more permanent effects. those are down the road. i don't see that happening

certainly in what we've got with sectors right now. >> if the essentials are the most important thing right now, when it comes to the consumer price index, look at ex food and energy i can't think of anything that's more essential >> yeah. i think the fed and policy makers have to look at everything they should be looking at all sorts of indicators. these price measures, some carve out certain things, some include certain things there's a value to looking at the metrics that take out some of the more volatile components. you also want to look at the volatile components. you want to see whether they have particular explanations that are driving things. again, to me, you know, i want to -- we want to see what households are actually facing, the hardship that they might be under with particular price increases. >> thanks a lot. appreciate your time this morning. >> sarah bloom raskin. when we return, word from

royal caribbean that passengers on board one of its cruise ships tested positive for covid-19 we'll bring you the latest details after the break. later, what has the return of live sports meant for online be betting the ceo of draftkings will join us dave and buster's restaurant change posted a surprise first quarter profit and said the recovery in its business has continued through the first part of the current quarter ay tuned, you're watching "squawk" on cnbc ♪ i wish that i knew what i know now ♪

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welcome back, everybody. chinese ride sharing company didi filing to go public in the states no word yet on the u.s. exchange >> the vision fund holds it 100% big investors include alibaba. >> this harkens back to last year's cruise ship infections.

this ship started in saint martin saturday. includes stops in barbados, aruba. this comes just 14 days ahead of the first sailing here in the

u.s. royal celebrity edge set to sail june 26th from ft. lauderdale. carnival's first sailing will be from texas in early july. >> seema, the cdc continuing to spar with florida governor desantis whether the crews can mandate the vaccine. we expect an update on this and what are we hearing? this went to court where both sides presented their argument to the judge the state of florida said the cdc's vaccination requirements violate the state's vaccine passport ban caught in the middle are cruise lines. florida is the cruise capitol of the world. 60% of sailings are from florida. if they require the vaccine, they could be subject to a hefty fine, up to $5,000 per passenger which could be $1 million or more if there's 200 passengers

on board a ruling from the judge is expected soon. >> before you go, just to put a final point on it. the ship where there have been two positive cases, was there a vaccine requirement on that ship >> yeah. this is a ship where 95% of crew and passengers had to be vaccinated yet still these two passengers were tested positive for covid and there was a lot of testing happening throughout the cruise even when they went off port, came back on board keeping covid off completely is to ensure that they can isolate these passengers and make sure that two cases don't turn into an outbreak which we unfortunately saw at the height of the pandemic back in march. >> seema, you said the crews had a 95% vaccination record did the two passengers that they got covid, were they vaccinated?

>> they were vaccinated and tested positive. one of the unfortunate outcomes. thankfully they're asymptomatic. >> seema, thank you very much. good to see you. when we come back, one of the street's top analysts bring us his take on the rollout of the high performance model s next, just how much equity u.s. homeowners amassed in a year of rising prices. it's a number you have to hear to believe it. that's next. stay tuned, you're watching quk x"ndhiisnbc. so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪♪

welcome back to "squawk box. homeowners getting a lot richer. diana olick joining us with truly eye popping numbers this morning. diana. >> reporter: good morning, andrew pretty impressive. homeowners with mortgages, which is about 60% of all properties, saw their equity jump by 20% in the first quarter of this year from a year ago that's according to core logic. that's a collective cash gain of close to $2 trillion break it down per borrower, the average gain $33,400 still impressive this is thanks to soaring home prices which core logic said were up 11% annually in march. that's the sharpest gain since 2006 and prices roseanne even stronger 13% in april.

high demand for homes amid the pandemic caused bidding wars in markets across the nation with the majority of homes selling at above list price record low mortgage rates didn't hurt either. this is great for everyone but especially helpful for the just over 2 million homeowners who are still in those covid-related mortgage bailout programs according to black knight. as these plans begin to expire this month, having home equity will help them sell and potentially get out of the trouble they're in that's an excellent sign for them going forward back to you. >> before you go, given that we are now seeing home sales slow down, do we expect prices to start coming down as well? >> coming down, no now home prices usually lag sales by 6 months. we are seeing sales slow because people are hitting that affordability wall what we expect to see is home prices gain. there are more like a 3 or 4%. i don't think you're going to see prices come down, especially

given that there's still such high demand and low supply andrew. >> by the way, what about replacement value these days you're seeing the cost of construction go up the ability to find contractors to do this kind of work. how is that sort of changing the price tag of real estate >> well, for newly built homes it's much higher as well you're seeing prices for both existing and newly built homes go up. even for renovations, people looking to do projects are seeing much higher prices. they're having to scale down you're seeing people who wanted a little bit less than before because they can't afford it that demand is there because it's driven by the millennial demographic of people wanting to buy. >> do you want to weigh in on the transitory or not version of what you're seeing in the housing market we all -- we keep asking about inflation. is what you just reported on transitory or is it forever.

>> reporter: no, look. you're seeing demand that is not only fueled by the pandemic but it's also fueled by demographics you have the largest generation getting into home buying years, they're having kids, they're wanting to move out into the suburbs. that's not going to go away. until the home builders are starting to ramp up which they have slowly, this is going to be a long run wave for housing. you're going to continue to see that demand for several years going on simply because of the fundamentals of the market right now. i say no on transitory that's my answer. >> diana olick have a great weekend thank you. appreciate it. >> you, too. when we come back, a lot more on "squawk. we'll talk about the state of online sports betting in america and that's increasingly okay with heading back to the ballpark the ceo of draftkings joins us next stay tuned, you're right here on cnbc with a hybrid, you don't have to choose. that's why insurers are going hybrid with ibm.

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welcome back, everybody. online gambling took off during the pandemic last year shares of draftkings soared by 335% and penn national gaming more than tripled

now as the economy reopens and people move from the digital world back to the physical, those stocks have under performed like mgm resorts and caesar's entertainment there is a clear divergence with the real world gambling locations being the winners. joining us is draftkings ceo jason robins we know you're here to ring the opening bell that's something you didn't get to do 14 months ago when you were going public. what's it like to be here now? >> it's interesting. i thought at the time we did a virtual bell ringing, i didn't think we would actually come and do it. hard to say no when you get an opportunity to come ring the bell at the nasdaq it will be a fun time. remember the past year, past ten years since we started the company. >> let's get back to what happens as the world starts to reopen, especially the economy here in the united states. people can go back to the casinos that they hadn't been

able to go to in over a year is that impacting your business? >> we haven't seen any dropoff really i mean, it's still obviously early in the reopening, but we look at data every day our cohorts look great our customer acquisition numbers look great so we've not seen any numbers in our business. >> what are you doing? i know your marketing budget soared in the first quarter. that was a little offsetting to some investors who worried about that, thought you would turn more profitable earlier. are you spending more on marketing because you want to make sure you hold on to your customers that you picked up during the pandemic? >> no, not at all. we spend on marketing primarily for customer acquisition it's all data driven we are way under our target for cac. we actually are trying to find more ways to spend marketing profitably it's really amazing that we've been able to increase spend so much and are acquiring customers more efficiently than before i do think that itself might be

a little bit of a function of the stay-at-home nature of the pandemic we'll see if that continues. i don't think there will be any impact but i could see a little bit of slowdown in customer acquisition. there's so much in the industry. five or six states have passed laws i don't think anything is going to be noticeable maybe instead of growing triple digits it's 80, 90%, something like that, but i don't think we're going to see anything material. >> so your customer acquisition costs, if they have gone down materially, is that because when you really hit saturation in the market or when the market is doing very well, like in new jersey i know based on new jersey revenue versus profitability, you make money in new jersey do you stop marketing then or do you feel like you have to double down >> no. it's not about feeling like we have to double down. it's completely data driven. we look at customer acquisition on a horizontal basis. if we can acquire customers with the right roi and pay back periods that we feel are appropriate for our stage of

business, then we'll do it it has nothing to do with it the fact that we're able to acquire customers in jersey even though you're right, we are profitable there, means we'll make more money in that area in the state. >> where do you find customers who are the best return on investment >> everywhere. it's the early stages of the market it's interesting because this isn't something where we're trying to create a new business nobody's ever heard of there have been people betting on sports since the beginning of time i think that right now what you're seeing is there's been so much suppression of that demand for so many years in the u.s. that all of these people that have been hungering for betting on sports for a long time are flocking to do it. it's a great thing to see. >> who do you consider your biggest competitor is it fan duel, penn national gaming or the casinos? >> we view our competitors as going to the beach this summer we think anything anybody might do to spend their recreational time, we want to give them a better experience. they choose to spend it with us

instead. if somebody stays home and watches nba playoff games instead of going to a restaurant, we think that's great. so it's really less about individual company and more about all the types of things that anybody can do. we want to make sure they feel like they're getting a great experience and getting their money that we're their chosen activity. >> that would be something that would concern me a little bit. if you're competing with the beach you're going to lose against a lot of people. we're getting into the summertime we're getting into a situation where people have been so sick of being at home and want to get out there again. do you track the number of minutes that people spend with you? what kind of results are you seeing >> we do good news is you can take your mobile phone anywhere so even if you are at the beach or somewhere else, you can still play draft kings a little harder to watch games people can stream on their phones as long as they're getting a great experience, so easy to access on your mobile phone we really feel like people will

continue to play we've seen that in the data. >> just in terms of the number of minutes people are spending in entertainment, in the gaming industry they have seen the numbers come down. what kind of declines have you seen, if you have? >> we haven't really seen it i do think coming this summer we might see a little bit of slowdown in customer acquisition. i don't expect we'll see much of an impact on our existing customer base. that's all speculation we don't know. 24 is an unprecedented thing obviously we've seen a huge pickup over the last year. certainly the pandemic was part of that. i think there's a lot of momentum in the industry, a lot of states opening up, great buzz it's hard to tell what's what. >> what kind of crossover do you see in your customers with retail investors i ask just because people were staying at home betting on the stock market this year we've seen a huge increase in the retail investor activity too. >> that's a good question. i think certainly anecdotally we

think customers passionate about the product want to invest in our stock. that's a great thing people who understand the business, peter lynch said invest in what you know i believe. hopefully i got that right maybe it was somebody else i think it was peter i think that's a great thing for many people. if they know something and they know it because they've experienced it, that gives me great confidence. >> i have to go off topic. maybe this is an apparel question can you stand up for a second? are you wearing a cyber pu punk nft. >> crypto punk. >> this is the crypto punk nft that was just sold at sotheby's for $12 million? >> yes our board member shalom, he made a bet with us, myself and my co-founders, that if he won this

crypto punk, we would wear this today. what kind of company would we be if we didn't pay our own bets? we had to stay true to the brand. we're paying the bet. >> are you -- more broadly are you an nft and crypto guy? >> i love it i do not own a crypto punk, but i do love it i've been closely following the space. i think it's really exciting you know, we love anything innovative and i think crypto and blockchain is incredibly innovative space so many industries are going to change because of it it's fascinating to watch. personally i'm a crypto investor i don't own any crypto punks but i do own various coins. >> the nft for the crypto punk was $11.5 million. how much was the t-shirt >> i don't know. i didn't make it >> you said you are a crypto

investor there's a big question about whether crypto is gambling, meaning, investing, if you will, or trading or is more akin to gambling which goes on on draftkings or is more akin to investing. what do you think? >> i'll let the regulators figure that out. i think it's a great new space, blockchain space that is going to transform so many industries. i think for some people, they look at it in different ways you know, it's not something that i think everybody looks at the same way, but i do think that it's something that hopefully given the nature of it, it's like the internet where it can really transform so many things that, you know, it's handled with care by regulators and others i just saw el salvador made bitcoin their official legal tender which is pretty exciting. i think that was a big moment in the industry. >> jason robbins of draft kings, have fun there's nothing to hit at the

nasdaq you are going to press the button and sign. enjoy. thank you for standing up in the middle of the interview. >> thank you. >> we don't usually ask our guests to do that. >> thank you. >> thank you coming up when we return, what does tesla's new high performance plaid car do in a market that seems to be getting more crowded every week. toni sagonachi joins us to talk about his first take on it stay tuned, you're watching "squawk" on cnbc 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, he got paid before his neighbor even got started. because doing right by our members, that's what's right. usaa. what you're made of, we're made for. ♪ usaa ♪

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let's get down to the new york stock exchange right now and see our friend jim cramer. jim, great to see you. i was of course following you on twitter and during our conversation in the 7:00 hour with robert frank about taxes and that propublica story, you sent out a very, very provocative tweet. could you elaborate for the audience who may not have seen it what you just said about billionaires and wealth taxes? >> we all know from propublica, it was easy enough to figure out who's a billionaire, right so why not put a surtax on billionaires now i did not expect this to be all that controversial

remember president lincoln was the first president who suggested that we do a graduated tax. i think that lincoln would be aghast that these people are paying nothing so what you have to do -- there have -- we've had surtaxes at various times. have we targeted individuals no we all know they're billionaires do we have to sit here and say, you know what, we're helpless? i think step up in basis, which you've talked about. the fact that they even have that loophole, which is so made for rich people, andrew. i'm so glad you bring it up. eyes glaze over. it's an amazing tax break. one of the best in the world we have to find a way, you're a billionaire, we're going to charge you 2% charge and we're going to come up with a formula, which we can do, that involves all the stock lending that you do where we can -- they're not billions of billionaires let's come up with a thing for this small group. >> is this then an elizabeth warren style wealth tax? or you're planning to tax

unrealized gains you have a different sort of formula that's capturing realized gains in a different way? >> how do we find out that they were billionaires? how? >> you looked at -- well, you opened up "forbes" magazine or you looked at how many shares they owned in their company and you did some multiplicmultiplic >> you're the irs. you do the multiplication and i don't want to hear that those people are disenfranchised by a surtax they're not. i mean, we have to start coming to the realization, i know everyone thinks they can become a billionaire. people on wall street bets, they're as savvy as charlie monger because they say things like that. one thing i absolutely, andrew, i'm tired of, is to hear -- to read that and jesse did unbelievable reporting, we all know it was just great reporting. jesse say, you know what, we're helpless there's nothing we can do. it's just the way it is in our country.

it's not the way it is in our country. by the way, this is how you start a revolution against rich people is you have this happen this is what happens >> is it a wealth tax or income tax? >> i'm sorry. >> is it realized gains or unrealized gains is it a wealth tax or income tax? >> they obviously are able to avoid paying income tax. not evade but avoid. avoid is legal that has to be changed i think that has to be changed >> jim, let me ask you one other question -- >> i'm not -- i'm not asking for them to stop the means of production. >> but one of the fascinating elements of this, the last decade, maybe 20 years even, we've talked about long-term focus by companies, executives at the top and short-term focus and taxes play a role in short-term focus i raise it only because if in

fact there is a wealth tax of some sort or the tax that you're describing, i don't know what we'll call it, you will have these investors selling down those shares, right? that will become another part of the calculus as investors? will that have an impact on other investors? >> well, i think, again, i am limiting the amount. i don't think someone's going to go and try to be worth 999 million so they avoid the tax that i'm talking about i'm saying there's an elite group of people and this society has to start addressing this >> okay. >> elizabeth warren talked about it in a way that i think is a little bit too severe, yes i'm trying to make it so that i don't want kulax killed by stalin in our country. you know everyone thinks our democracy is so solid. on january 6th i didn't think our democracy was that solid i think we need to think about the institutions being weaker

than we decided. read "tyranny" by tim snider at yale and you'll realize how fragile they are they should be thinking about how incredible it is the government protects them. >> jim cramer. his handle on twitter handle on twitter is @jim cramer so if you like or dislike, you know where to go have a great weekend, my friend. >> i'm tired of it but i love you guys >> we love you, too. have a great weekend we'll talk to you soon meantime we will talk about tesla because they made a statement with plaid, the name of the company's new souped up more expensive model s with elon musk and talking about the plaid and what it does for tesla's business, increasingly competitive ev market, tony, the bernsteen senior research analyst covering hardware, a $180 price target, and you have

been a tesla skeptic does the plaid release change any of that for you? >> no, it doesn't. but let me be clear that i've been a skeptic about tesla's valuation, not about the company itself and i think, look, the plaid was a welcome reassertion of tesla's technology leadership in the ev space, i think the announcement last night was not really a surprise. they had released the specs in terms of the acceleration times. and the new interior in advance, so this is really a marketing and coming out party and an announcement that tesla is delivering the new model s, but it's a tour deforce, i think from a technology perspective. my issue with tesla over the last eight months, since we lowered our rating, has really been about valuation >> let me ask you a little about valuation. part of the valuation argument that you've been making is a

long-term market share argument. which is to say that i think you believe that volkswagen and so many other automakers are going to come up with electric products that really do compete meaningfully with tesla and we've been having that conversation for a very long time, and we haven't really reached that moment. when do you think that moment is going to happen? >> well, two things, andrew, on the valuation side, it's not so much that tesla is going to be undermined it's really, even if you give tesla the benefit of the doubt, that they will become as large or larger than volkswagen, sell more than 10 million cars. that's going to be at some point in the future. and you have to discount back those cash flows, so the fact that the stock is worth, you know, two or three what car companies are today, that are making 10 million units means it has to make a lot more than that in the future. at much higher margins to justify the valuation. so that's the issue.

but you know, tesla has 20-plus percent market share in electric vehicles today invariably, that will go down. it may go down to 10%, which will mean it will sell 10 million cars in the future, that could certainly happen, but the car industry globally, it's a highly fragmented market there are local preferences. there are different needs in different countries. so you know, sustaining 20% market share of the overall car market ultimately when it becomes electric, i think will become very difficult so it is inevitable that tesla will lose share but that should be expected >> tony, shorting tesla has been thus far a fool's errand if you look at that chart how should investors play? would you actually suggest that somebody short this stock based on your expectation of what the stock is worth >> i think it is a very difficult stock to short most of the institutional clients that bernstein serves

are long only investors. and now that tesla is in the s&p, you have to make a decision, are you going to be downweight, overweight or market weight that stock, and our recommendation is to be underweight the stock. and so that's how i think about it the stock is very news sensitive, very sensitive to elon musk's tweets, i think if you were, you know, there's a borrow associated with it, so shortsing it is not for the faint of heart, for professional investors, who want to pare trade it and think about it longer time, i think they can short it because again it is not the company per se, it's the valuation and we've seen this in several segments of the market. >> is this a meme stock? should we have this on the meme list >> it's not a -- it has a cult-like following. whether we would call it a meme stock, i think there's no, you know, the short interest isn't

as big, if the stock can't be bullied around in the same way because of its market capitalization that meme stocks can, but it is, it has a cult-like following. and stocks with a cult like following can have valuations that are disconnected from reality. now, we'll see in the long term whether that's the case or not but our belief is the valuation today, for a company selling a million cars a year, trading at multiples of companies that are selling 10 million cars a year today, seems disconnected. >> okay, toni, have a great weekend. we appreciate seeing you we hope to see you again, very, very soon. >> thanks, andrew. when we come back, some stocks to watch ahead of the friday morning opening bell. stay tuned "squawk box" will be right back.

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the word on mcdonald's, another day, another data breach, this time the fast food giant chain saying there was a data breach in south korea and taiwan that has exposed some customer and employee information. they say it was a small number of files that were accessed. mcdonald's has hired an outside firm to investigate. only korea and taiwan had customer personal data that was breached. it is just a little more than a half hour to the opening

bell on wall street. let's get to dom chu, with an update on some of the morning's pre-market movers. >> interesting news on mcdonald's juxtaposing with what happened with electronic arts with the data breach anyway, check out shares of zoom video, initiated with an outperform rating at rbc capital markets and a $450 target price, they like. so staying power that zoom video and communications will have in a post-pandemic world so watch those shares up about three quarters of 1%. also checking on the meme stocks, amc in particular, gamestop, i just put amc up there first because it is now bigger than gamestop, but it is up 5% in the pre-market trade and gamestop 5.5%. the number two and three most searched tickers on cnbc yesterday, and to give you an idea how popular they've been. one other check on cryptocurrencies, we're seeing some moves generally lower over the past 24 hours or so for many of these and bitcoin up 2% and 37,000 ether down about one-third of 1% 2459 the last trade there.

fractional gains, lightcoin. and doge coin, 32 odd cents. down 1.5%. bath guys. >> dom, thank you very much. that does it for us this week thank you for being with us for the week keep an eye on the 10-year because the yield is falling back below 1.5%. the lowest level since early march. andrew we'll see you next week hope to see you back here then too. right now, it's time for "squawk on the street. good friday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. futures are still hardened by the way in which cpi was absorbed 10-year 1.42, a three month low. news on the cruise lines, chewy, infrastructure talk. and our road map begins with the meme, and momentum and gamestop and others