was back above 1.4 i saw that it briefly was back below, but still seems really, really low we'll do it again tomorrow, which we decided would be thursday >> yes >> half the show to figure that out. >> it did. make sure you join us, "squawk on the street" is next good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. futures do extend some gains as fed chair powell on the hill today says substantial further progress is still a ways off lots of earnings from the banks, apple is poised for a record high our road map begins with inflation nation powell preparing to testify before congress says inflation has increased notably. we'll tell you what you can expect to hear. plus, the big banks report earnings we're going gto give you the

numbers and commentaries from the ceos. and delta shares moving higher after reporting its first quarterly operating profit since before the pandemic with some help from some federal aid where do i start here, jim the banks, i know you've been looking at bac and citi today. >> i think what matters here is that we're going from companies that we've kind of said, you know what, those banks really aren't that great to saying, wait a second, wait a second wells fargo and citi are cheap versus the others because they haven't been doing that well i'm looking at wells fargo and i'm saying nothing special, but they beat on revs, they bet on expenses, they bet on net income wow, that -- wow, david. it's a trifecta, charlie sharp, he's back. he's bigger than ever. >> okay. now the stock has had a strong run from the lows as you point out. it went a lot lower than

anything else. they've had a long way to come become a, still does. >> to me, it is still a pitiful helpless giant the fact is that he, charlie scharf is making it more efficient and, by the way, honest >> honest. well, honesty is important it's good. >> in banking particularly you want that. yesterday we had good numbers it would have appeared, certainly from goldman sachs without a doubt. 33 billion in revenue, that used to be a year, 12 billion of profit that used to be a year in fact, that would rank as their seventh best profitable year at goldman for a year instead of being a half a year. >> and yet, they were humble. >> and yet the stock didn't do anything >> the stock is up like 150 bucks from the last time they really focused on it you're looking at david myopically you're a myopic person what mattered is not the 47 minutes of how it did yesterday. it's a continuum it's a journey. >> it's a journey.

carl, it's a journey >> it's a journey. did you see him yesterday with the food trucks? all he did is say everything's fabulous this is fabulous that's great this is fabulous it was fabulous. >> he did talk about the chinese perhaps delaying some ipos back here, which we're going to talk more about later on this morning. >> look, i think that goldman should be much higher. i saw some price increases to 400, makes sense can we accept the fact that jpmorgan was so great that nobody cared. >> we do have a bunch of price target hikes on jpm, hyper 184, cs 177, right? >> jpmorgan was terrific let's just step back for a second these banks should have been in light of the fact that we were supposed to have a depression from covid, these banks are showing you a balance sheet of the american consumer that may be the best ever, best in our history. >> yes >> we have been dealing with a consumer in america who was always chronically over spending

well beyond means. >> not saving. >> now we are -- >> it's incredible you take a look at total deposits, average balances, wells fargo, for example, quarter ended june 30th, 835 billion. that's a 17% increase, but just the number alone. >> david, it's all from the fed, david. >> additional deposits in wells fargo in one year. >> the numbers are the same for bank of america. they're the same for citi. they're the same for jpmorgan. >> this is unusual we're americans. we only know to spend. what happened? it's like a disease. >> and as a result, guys, at wells, consumer loans down 10, commercial loans down 22 do we ever need to borrow money ever again >> well, i mean, i think that brian moynihan would tell you we're about to have an explosion of loans jamie dimon thinks there's about to be an explosion of loans. do you know that travel loans are up 8% from 2019.

that's a phil lebeau emergency number >> travel loans. i mean travel expenses travel expenses. up 8% from 2019. up 8%. people who have money will travel it's the millennials they feel so confident they've embraced delta and not just the airline. >> no, which we'll get to. and credit quality obviously has improved as you said we've got a lot of reserve releases investors don't really react to that. it helps profitability a great deal you can see what moynihan had to say. consumer spending he says has significantly surpassed pre-pandemic levels. deposit growth as we were just saying is very strong and even loan levels have begun to grow. >> and yet his stock's down. >> they didn't hit some of the estimates i guess. >> missed on net interest. okay, net interest margin. all i can tell you is that interest income did not go down much even though the fed slashed rates. can you imagine what will happen to this thing when the fed

starts raising this is the rocket ship, and i'm not talking about virgin galactic cathie wood should think about this it should be a woodstock if they start -- >> so her comments yesterday doubling down on growth saying that she would not be long oil here, you think she's backing herself into a corner? >> in the last few days, of course she does not run a mutual fund because they're going to be rocket ships she's on at 4:00 today i did that -- it's called provocative. >> she's big on space. he was saying the banks are going to be rocket ships, therefore cathie wood should buy them but not really because of course she won't. >> ain't you ever heard of an emoji? okay so cathie wood has not gotten good fund flows in the month of -- most recently. the flows are bad. she would say i have nothing to do with flows, it's true, but it's a great barometer of how people are thinking, and i believe that that willy nilly

growth period seems to have peaked a little bit here, but i do believe like her she and i agree on inflation now, she of course says we're on deflation. that's a hard one to swallow i'm not seeing deflation. >> you're not seeing deflation. >> not when you can fget a job. >> larry fink this morning certainly seems to differ. >> very interesting, intriguing -- >> secretary mnuchin also certainly seems a bit concerned. >> thinks framework for inflation is whether or not it's transitory, we're entering a new period in which we're repatriating jobs, manufacturing, national security is going to sort of cut off a bit the efficiency of global supply chains and the price benefit the consumers have gotten from it, here's what fink said. >> overall with the amount of fiscal stimulus and monetary stimulus and more importantly with the amount of cash that is looking to be put to work and i believe the trend line is still going to be upward, maybe not as

fast, maybe it's going to be very moderate for the next six months as we digest how the world is able to handle the delta variant and the speed with which vaccinations occur throughout the world, and then, two, you know, what is going to be inflation out six months and a year >> and speaking of which, flash head just now black rock to raise base salaries 8% for all active employees. >> i have a wrap on jay powell i'm going to review right now. jay powell, he's not a communist. >> thanks for that, jim. that's good to know. >> i want to give you a little parameters here. jay powell, here's a little bit more like a trotskyite where the workers should own more of a means of production. i think jay powell thinks people have been underpaid in this country, that ceos are overpaid, that we've all made too much money who are rich, and he actually wants people to participate in the great american dream of making a

little more money than they used to, and in that sense he's a bit of a revolutionary what he's saying is how long are we going to allow this disparity between the rich and the poor tin this country >> which has only been exacerbated over this last period. >> i think when he hears that 8%, i think what he secretly says is, you know what hey, that's not bad. how about when mcdonald's people are starting to get a bonus. isn't that good? i mean theyir lives haven't bee great. >> inflation is not easy either. >> the person who's really hurt is the person who works at chipotle no, no, because technology will take care of that kind of inflation. that's a benioff rap >> so you do think that software, technology, demograp demographics, productivity. >> net net, you'd say you're a dove on the over five years? >> i am.

but i'm also someone who believes the country is way off the rails when it comes to the rich versus the poor and that when i hear that there are -- that it's hard to get a job, there's too many jobs for truck drivers, i say to myself that's a lousy job. why shouldn't they be paid the way that white collar people are paid, for heaven's sake. why should white collar people make so much more. that's what i'm saying with jay powell he goes home to dinner he says to his wife, you know what i a lot of people who have never had a raise in this country are getting raises and that's good and we have to just flip the paradigm for a second. >> who work their butts off. >> we don't want people to make more money because we want more capital, he's saying they've got raises hall hallelujah the dishwasher instead of making 15 is making 18. a guy gets out of prison, white collar crime, guy gets 18. that's good. it's not socialist

it's good. >> if that's true, he better hope that inflation stays within the box and one thing we'll be listening for today is whether or not they're going to say, you know what, this may go on for a little longer than we thought. >> i think that once we finish this transition of hybrid, n non-hybrid where people are realizing they're going to get in trouble, how about the interns being called back by bank of america, right once you're called back then that whole transitory thing where we're buying a home here, rich people are buying a home here, i think what powell is doing is saying, you know what, the hybrid's going to play out, and the cost of this is that 40 or 50 million people who had no hope of getting a raise are going to get a raise, and they don't have to go to stanford computer they don't have to be computer scie scientists. >> it's a great appoint. it underscores your call that this is going to go lower longer by the way, you saw some --

>> there's the american dream. we're not american servitude we have a servitude class. >> that said, there are those who will argue that inflation is pernicious whether it really gets going. >> it's pernicious for my dishwasher who's finally making 18 bucks. >> anybody living on a fixed income, which is more and more people how many baby boomers are retired? >> larry fink addressed that >> it was a great interview. >> we just saw some quotes on moynihan on back to work 85% of the buildings being opened are okay, but they're not. bank of america's more in the citi camp in terms of after labor day we'll see. >> he wants them back. he wants them back. >> yeah, but their brokers, talk to a merrill broker ask them where they are they're not coming back. >> i told you that the hybrid model at goldman crushed it. >> i bet you they don't even have as good of numbers when they come back. >> it's not clear a financial adviser needs to be in the office they're not. that's a lot of the work force

they got a loss of them. bankers. >> business travel, which you have hounded me on, still not coming back. >> i was with a banker last night, says i want to travel, and this is what i hear from all my clients you know what, if you want to come we'll have dinner, but i'm not in the office. >> were you at mariah. >> i wasn't, i will be soon, but i wasn't last night. >> these are people who go out to dinner versus the people who go to bar psy and miguel and get an $8 beer. >> i will not be there because i will be. i apologize for that. >> i'm just saying that jay powell, look, i think it's okay that people make a little more i'm sorry that i sound like a communist. >> it's 30, 40 years of the pendulum swinging to capital than labor >> can't we just have people make a little myore money. i washed dishes. my father fired me from that job, he wanted me to be a busboy >> what am i paying to eat

there, i kept the prices of food up 20%. >> only up 20. okay >> again, fink's point about equities, the margins are going to be the key. what you can absorb. >> right and then i'm just saying you've got to charge more if you're going to pay people what they deserve. people are working incredibly hard, and these bosses work two hours and the company's falling apart, and they're making millions and my guy comes to work at 3:00 p.m., he works until 11:00 p.m., and what's wrong with him making a little extra money, what? >> i'm with you. >> lake son pea. i don't know where that is. >> it's in the middle of the state, new hampshire. >> delta's ed bash tan talked about what he thinks corporate travel is going to be in mid-september. with powell on deck around 12:00, futures agreeing. back in a minute mobile app 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-

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on the most reliable wireless network... oh my gosh! ...plus up to 400 dollars off her wireless bill! wow! cheer on team usa with xfinity internet. and ask how to save up to $400 a year on your wireless bill when you add xfinity mobile. get started today. demand is robust in fact, u.s. consumer travel is at, if not even beyond the levels that we saw in 2019 we're working on business, business is coming back. international is a little choppy as you said, we were able to take what had been a series of fairly large losses we'd been losing for the last several quarters, about $3 billion a quarter down to a loss of less than $900 billion and in the third quarter we're expecting to be solidly profitable.

>> that's ed bastian it's the first quarterly profit since 2019 thanks to federal aid, jim, and it's coming on the heels of the americans preannounce. >> i think these are such great things everyone was supposed to go under. you remember there was a period where we all felt if you got into a plane it was the most dangerous place on earth for covid. >> 100 days ago? and they got saved all these companies could have easily gone under. every one of those could have gone under now they're buys united airlines needs international to come back. >> they did pile on a good amount of debt a lot of them added a decent amount of equity typically far above where they were pre-pandemic in part because of that. >> the cruise ships are alive. >> jay powell, i have to give the security -- the guy who's in security business now. >> mr. mnuchin. >> yeah, i've got to give him some credit. but jay powell, again, jay

powell deciding, hey, you know what maybe it's better they don't go under. let's put a floor underneath them, the day that carnival cruise got the $8, went to $8 and people said, well, that's the end. no, we saved so much money as a country bailing out these companies. frank del rio, i don't talk that much about this lawsuit where he wants to make the boats safer and that's not other -- you know, that's contra. >> right, understood. >> wait new mexico lambda hits us it's going to hit us like a ton of bricks. lambda is the next one everyone's talking about. >> is it omega >> alpha, delta, on to lambda. >> delta plus, all the jargon related to the various people say i don't worry about long covid. >> that was goldman's point yesterday. goldman did a piece in the afternoon saying any resurgence

in this is not likely to shift consumer behavior. it hasn't so far. >> i think it's incredible >> do you have costen on at 10:00? >> i don't think so. >> he's on tech today. >> he did a piece on antitrust last night he sent it to me at 1:30 a.m i think that's when he finished it it's excellent we should get him on. >> i think maybe tomorrow what i'm told. >> it's an excellent piece we trashed a lot of research >> cramer's mad dash in a moment along with the opening bell in ten minutes. don't go away.

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let's get to a mad dash here as we get ready for an opening bell it's hump day, by the way. >> it is hump day. >> yeah, remember that >> you're right. david lohke season two why do i mention that? because one of the more thought provoking pieces i read in a long time hit my desk today. >> i saw that piece this morning as well. >> one of the reasons i like this, the guy knows how to do a title, disney what happens when one world opens as another slows. now i happen to like this piece because there is a big, big split here, which was disney plus doing well but how about the openings we're hearing more and more about the openings what i like about this, david, in particular is we are starting to see other revenue streams doing well and michael doesn't emphasize that enough. the espn going up, the theme parks full capacity. >> espn going up, what do you mean by going up

espn plus you mean or direct to consumer. >> espn plus they put a price increase on monday night, david. do you think anyone said, ooh, i don't want to take that now? >> not true. >> not in front of football season. >> there are still the questions about espn not questions, we know what way espn is going. >> what's left about espn plus is what you need to play draft picks. people are worried about these gambling stocks. >> why >> plethora. plethora >> got it. back to disney >> but this piece frankly i find makes you want to -- >> is it a positive piece in your opinion >> it's the most neutral piece i've read in ages. >> that's what i thought a tripartite approach, and they all kind of yield $184 >> you sold disney -- >> i know, i know. >> and you seem to be having some regrets a little bit lately, but i don't know >> i think the story's changing. i think the story's changing starting to emphasize how much is going well outside of the house that's what i wanted to

hear i didn't want this to be a pandemic play. it's a post-pandemic play. disney plus still doing okay david, you want to go out. you listen to what brian said about travel, where are they going? >> they benefitted from the enormous growth in -- >> do you think they're going to cleveland? they're going to disney world and disney, there's travel i am saying you got see how many people stay with disney and don't leave. i know that probably bothered you. but i am saying this is a neutral piece and i'm kind of there, but i really want to be a little more itching to be more positive, and michael did not give me enough to itch >> he didn't >> no. >> this was like -- you know what this was like, it was like cal calamine. >> someone got to you, made that bold decision on disney and then somebody got to you. i don't know who i'm going to get to the bottom of this. we've got an opening bell a few minutes away

you can catch us anytime anywhere, you can find out who put the arm on cramer. "squawk on the street" opening bell podcast

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keep your eye on apple today. it's going to benefit from a couple of different things, jpmorgan adding to the focus list 175 target, along with some of these reports, jim, that they are looking to increase iphone production to 90 million units this year, would be up 20% if it gets to 149.81, that would be a $2.5 trillion market cap. >> let's go back to when the stock was at 116 and 118. there were three different research reports that said there was nothing exciting in the pipeline, that this was a flop that no one really cared and that it wasn't needed and this is going to be one of the first really non-pscycles that was just one, david, i'm talking about 100% wrong 100% wrong that's not helpful. >> no, it's not a helpful

analysis, i suppose. yeah i mean, the stock, what do you make of this recent move it was slashed only a few weeks ago. >> people must have known that the orders were coming through by the way, let's just understand that you want to buy the -- you want to buy sky works and you want to go back to hawk 10 now that east not buying the sas institute, which sounds like a charity for god sakes. >> they thought better of it >> you can do kor bow too. i've been trying to gravitate. >> jose corvo. >> i want to get more into $10 worth of apple that's what i think sky works is going to get $10. >> we'll watch for record highs in a minute on apple opening big, the ivy brain tumor center at the nasdaq, the u.s. veterans hall of fame. to david's point, i mean, apple along with the other big faang

names are a big reason why the market's done what it's done since may. i think yesterday you tweeted something about in the end you buy faang. >> in the end it's all faang. >> by the way, costen's piece. >> it's impossible to pronounce. >> i gave up i just do faang plus m did you know i created faang so what i found was interesting is even in costen's piece, he talked about the concentration of business in america and then he reaches the conclusion, dave costen from goldman sachs, he reaches the conclusion they're not going to do badly in this antitrust world. they don't need to do any deals. i felt even more sanguine. >> they're not going to be able to do deals. it comes up all the time we have facebook making a move today against lina khan as well. >> joining amazon, petitioning for lina khan to recuse. >> the chair of the ftc who has

written extensively or did certainly about amazon, but this is a new thing, i guess, get her to try and get -- by the way, the ftc case was already thrown out, but they may bring a new one, which is why facebook would not ask her to be -- from that decision. >> the judiciary, there is a judiciary. it's just an agency. i mean, it will take years they will make it so you might not want to call scott barshay and do a deal. executive. >> the only m&a attorney you know by name so you name him a lot. >> yeah, i do because he's also entertaining and terrific and nice. >> wonderful >> compass minerals, david you're probably not familiar with it. they discovered a lithium find, it could be 2.4 million. when we think of ev which everybody's thinking of and you know who's thinking of ev, cathie wood. that's, compass mineral up huge because lithium is needed in ev. >> by the way, copper -- is it

up huge? >> cmp. >> lina khan -- >> everybody's very scared of her. >> they are scared of her. it's really interesting. it's kind of like a tr >> ooh, i like that. that tune is taking me back. >> by the time we get to woodstock, lina khan is going to crush it. >> really? >> the family stone instead of that. >> sky works and corvo are the number two and three on the s&p. >> clairvoyant liam griffin is such a great guy. you know, he is a sox fan and patriot's fan. got to be from tampa bay. >> i'll try and find one. >> energy company. >> sure, whatever you need >> we got a million things to get to and you're talking about football >> i think vir tiff is the best spac and it was the first spac when you look at citi, wow,

they've spoken the market has spoken and citi is the winner. it's not as bad as it used to be. >> it's also been the underperformer without a doubt. >> that was the headline we're in the as bad as we used to be. i think that was the headline. >> a market cap below that of morgan stanley, not that far from goldman sachs this is citi, a large global behemoth >> i'd love to work that word in morgan stanley said the problems with the 797 they call it a minor headache i call it migraine i think you should buy biohaven. i think pfizer's going to buy them >> you take the problems of boeing more serious than this analyst does. >> i took a infrasnurtec this m at 3:30. they've got to be much more hands on at boeing that was responsible for most of the climb in the dow yesterday >> i do want to focus on spacs

for a minute >> you have a momentous? >> you've taken a look at it let's do this deguys you've gotten on gary gensler, the s.e.c. chair. >> he responds immediately there is direct response to my 17 different attacks on him. >> our viewers may remember it was only last week they cut the price they were paying for this momentous basically in half, satellite company, but the s.e.c. has charged them and come after them in a big way. >> ever. >> you've got the complaint here >> it's brilliant. the complaint's just nothing but brilliance. >> i've got the press release. >> i got the complaint i read the complaint michael >> here's the complaint. we're just holding it up for you so you can see it. >> minutes to the proceeding. >> let me give you the specifics on it. still trading above 10 >> that's crazy. >> here's the quote from gensler. the case -- well, let me get to the charges. they allege the company misled investors. let's read the quote first, the

case illustrates the risk inherent to spac transactions as those who stand to earn significant profits from a spac merger may conduct inadequate due diligence and mislead investors. that's the key to the case here jim. they allege the companies misled investors about technology, about national security risks in terms of the former ceo. >> hold it, dave, give the best line >> go ahead. >> investors have been told that it successfully tested its proposal technology in space when in fact the company's only in space tests failed to achieve its -- >> everything was off here >> what is it called stable road. >> screen door slams >> yeah, screen door slams what a song. anyhow, they also are saying, hey, if you were a pipe investor here, they're going to let you out. and they're going to pay 8 million in penalties but the key here is if you're a pipe investor, you can say good-bye he's forfeiting his 250,000

founder shares they came hard here, that is the question, right? the sponsors -- is the sponsors economics align with general investors? not so much. not so much. because as i pointed out many times, many of them given the compensation structure can make money on the spac even if the stock were to fall to 5, 4, even as low as 3 in some cases whereas of course for the investor out there, you want it to go up from 10 typically strangely this one, i say strangely because there's so many questions about the business even though they cut the price in half, it's still $0.61 above whereas you're seeing many higher quality ones not above. >> i think i had a stable road last night or is it -- >> i don't know. >> stable road that's a great name for a beer >> you've been on gensler, the s.e.c. makes a move on spacs it's important it's important to note. >> i think they move with incredible speed with efficiency and creativity

i do actually, no, that's a quote from the acting director director kocomes out i think my movie is great, efficient and fast >> they're holding individuals accountable for their statements to investors which were of particular concern when they're aimed at improperly capitalizing on public interest and popular investment vehicles such as spacs. >> finally >> you want to go with sponsors who you know do due diligence. there's so many spacs chasing so few company to some extent that the companies can have their choice and say, well, actually, i want a higher price than that guy who's not doing any due diligence. >> we'll hear from cathie wood tonight. she's backing away from chinese spacs. she's been a real space aficionado she has elle brands, everything's moving. that's matthew boss, jpmorgan. >> they do raise the guide lots of target increases on lb deutsch is at 99

jeffries goes to 75. >> bath and body works when you have a pandemic that's involving cleanliness, you want bath and body works i have to tell you that qualcomm is buyable after that apple position i'm not worried about the tiff, i think it's solved. newel brands, remember when that was headed down, down, down, that's over. >> they changed ceos. >> martin franklin is no longer involved bought his company >> can i go back to charlie scharf >> you're jumping all over the place here. >> i'm trying to cover every single company in the s&p 500. >> now we're looking at semiconductors just try to keep up a little bit here. >> now let's go back to wells fargo. go ahead. >> i think that wells fargo has gone from being the most hated to being the most amorous. >> really? >> yeahment. >> why >> because everyone knows in the end charlie scharf gets his man. first time i saw him he

basically called me an idiot the second time he called me an idiot. the third time my wife was there. >> when i met charlie, he couldn't have been nicer said i'm one of the smartest guys he knows. in really? >> that's not true >> for a second there. >> we did have a good time >> i love him. he's not a huge dog. he's got one of the big -- i am pro-dog. he has the biggest dog i have ever seen. charlie and amy. nice people, but charlie instantly did explain to me how i didn't know anything it's kind of the first thing he said to me. >> he's been in that job for a while. there were a lot of challenges at wells fargo are you saying he's there many of those. >> he was able to make the changes that makes it so it's one of the largest positions in my travel trust. even though charlie may say hey, you know, cramer forget him, i'm not forgetting charlie scharf. i think he's real, and i think

the numbers are great. >> got it. >> and i think when charlie comes on, the cfo, 4:00, cfo closing bell the ceo going to be right here. >> sitting right there, and he's going to be wearing jeans, got the white hair, looks so cool. >> totally. >> that guy's coming in brioni. he wears levis >> we've got to start lining up some interviews. it's time we start putting people there besides gelfan and who was the other one? >> spencer radcoff who we also love having by the way. >> he's got a lot going on >> we do have a few downgrades today, peloton, out of wedbush conagra out of b of a. >> that piece was like -- i'm not kidding. it said we thought the quarter

was good but the stock went down so we're downgrading it. that's real dirt that's journalism. peloton down 6 because the guy said people are starting to go outside. >> wedbush's general point is consumers have a lot more options now both inside and outside of the home, and they're going to wait and see how this shakes out in this new era of growth. >> i don't know, i think when the ceo comes on he makes a pretty good case that people's -- you know, that that's a change, that people like to work out at home, but as i was in the hudson yards, they make it look like spinning the most fun thing of the world in the middle of hudson yards, when you go to milos. >> there's a nice equinox there too. at some point still go public through a spac, though >> are they going to go with thunder road >> i don't know. i got it still in my head.

>> screen door slams in their face >> like a vision she dances. >> what else could they be besides that >> roy orbison singing and i want you only. send me home again, i just can't face -- >> we do have dow 35k once again and an s&p record high let's get to bob pisani. >> yields go down, stock market goes up and still not afraid of inflation, despite all the talk about it banks doing okay today that's nice to see we've had titanic numbers, not a lot of price movements recently in the banks tech's new high, energy okay, industrials up nice little mix in terms of the markets. i don't normally put up the earnings beats the market is expecting titanic earnings expectations right now, and on average captains have been beating about 20% the last two or three quarters, and they've got to keep that up, and so farther this is the percentage they're beating. we've had analysts not even come

close to some of these estimates today for bank of america, pnc and citi group the most bullish analysts were not as high as the actual numbers came in. this is really quite amazing if you look at these numbers. there's a variety of reasons for it the important thing is the market believes it if you look at the board here, what we're doing here most of these stocks are holding up fairly well. citigroup, if you look at the chart of citigroup, citigroup was $80 a few weeks ago. these stocks are well off their highs. they hit their highs really in the earlier part of the year in february and march at least they're holding up okay if you look at the bank, kbe, the bank etf here, these stocks all had 50% run ups. 50% in the last quarter of last year, in the first quarter of this year on expectations of higher interest rates. there it is, and they topped, when the ten-year topped in february and march, and they haven't been able to get above that really since then so there's your primary mover for the overall market in terms of black rock, larry fink terrific this morning as he

always is. can i just point out, i know we obsessed about robinhood all the time here, who really has the money? black rock manages $9 trillion in assets. vanguard manages $7 trillion in assets charles schwab manages 3.8 trillion robinhood manages 80 billion, 1% of what black rock and vanguard manage robinhood has a lot of wonderful investors that have a lot of small amounts of money black rock and vanguard and schwab have a lot of investors that have much larger accounts that are there i'm just pointing out where the actual money is and perhaps where we focus some of our observations overall the ipos keep coming just rang the bell for his company, went public a little while ago. we've got 15 ipos trying to raise almost $4 billion. it's got slow down from the first quarter. it's not here's what i don't like

year-to-date the average ipo is up 18% the average ipo is actually trading down after its first day about 9% that's very disappointing. why? it means the average guy who gets in on the first day is not making any money, only if you get in be ever and start trading on the first day do you make money and only 53% are above their ipo price right now. is that good or bad? a little bit of disappointment lots of ipos, yes, first day pricing fabulous after that, not so great you want to keep an eye on that. we've got some big ones this week b week, though take a look at krispy kreme. krispy kreme a good example, $17 prices closes at 121 on the firs day. it's 17 again. still not a hlot. it's better. it's made some money you see what happens all the money is made on the first day there. this week a lot of them, i mentioned 15 of them f 45 training, big global tech franchise, 20.3 million.

15 to 17 should price tonight and maybe we'll see mark wallberg who knows, tomorrow, that would be a lot of fun bring some celebrities back on the floor. remember when movie stars were coming down here i miss that. bring them back. >> i'd like that very much, bob. we'll see if wahlberg will maybe come to the mic. maybe cramer can chase him down. >> oh, my god, yes doen. >> done. >> we did get ppi coming in pretty hot, 73 year on year and fed chair powell's testimony on capitol hill, house financial services begins right around noon ten-year 1376 and the dow above 35 k back in a moment

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people are ready to go the vaccines work. we have 72% of our delta people vaccinated they're continuing to grow >> that's delta's ed bastian talking about the delta variant earlier on "squawk". seems like the bigger frustration is european travel, and leaning on the white house saying americans can go to the eu, why can't they come here >> american express, their report on the 23rd, they're doing incredibly well just with domestic, small and medium size business can you imagine when you get international, that's the stock to own you buy it now, betting -- oh, man. that's steve squiery, a fantastic executive. that's the stock to buy if you believe europe is going to come back i do since i'm going to europe. i know others have gone to europe i don't believe that -- i think -- countries that are not great vaccinators, not unlike say missouri, show me, that's

the theme of italy, by the way, show me. i'll show you the leaning tower of pisa, show you my place. >> let's go to your place. >> can you imagine doing this show from jim's place? >> that's going to happen. >> cleopatra's needle. >> that's going to happen. a really good olive oil harvest this year. >> yeah? >> our wine, little -- little tingle, you know >> still waiting on the olive oil. >> the olive oil press. >> night train feel to our wine. >> nice. >> early >> nice. >> hanging on the gains. dow up 100 points and the s&p, not too far from 4400 once again. stock trading with jim is coming up next. competition beat us again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. it's got to be something workday. i think i got something.

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♪ watch the olympic games on xfinity ♪ to ♪ root for team usagy and feel the energy ♪ ♪ 7000 plus hours of the olympics on display ♪ ♪ with xfinity you get every hour of every day ♪ ♪ different sports on different screens ♪ ♪ you can watch it anywhere ♪ ♪ and with the voice remote ♪ ♪ you never have to leave your chair ♪ show me team usa. ♪ all of this innovation could lead to some inspiration ♪ ♪ and you might be the next one to represent our nation ♪ ♪ this summer on your tv, tablet, or any screen ♪ ♪ xfinity is here to inspire your biggest dreams ♪ it is time for jim and stock trading. >> sometimes i struggle. a great piece by raymond james called beauty in beast mode about ulta, stock is moving. the one i want to sing aloud, lululemon, goldman sachs, lulu was an idea like peloton you thought that's what people wear. that's what people wear and now

we're going to start going out, not going to watch -- no, lulu has become part of the fabric, part of the firmament, stock breaks out buy it. >> even here >> yeah. >> good. >> david, have you seen the men's lulu >> i got a couple of pairs of those as a father's day gift. >> did you shop? >> no, it was a gift they're nice. >> i wear -- when do you wear it all you wear is a suit who are you kidding? >> i have a 4 a.m. workout and i wear it. >> okay. >> you don't wear a suit when you work out, and a tie? >> you know what, i -- i think the problem is their -- >> a little more give. >> the armani of the italians. >> double pleat. >> that soccer outfit. they wear double pleated i can't do that. i can't get away with a single breast. >> that's very deco. how about "mad money" tonight?

what's up? >> rusty braziel, we'll find out if natural gas peaks it is part of the inflation firmament, that jay powell, who wants to have people do better in our country, he's tired of just rich people doing well. i think it is admirable. >> i do too. >> we're a couple hours out from powell we'll see what he says "mad money" 6:00 p.m. eastern time dow's up 111 don't go anywhere. this is dr. arnold t. petsworth, he's the owner of petsworth vetworld. business was steady, but then an influx of new four-legged friends changed everything. dr. petsworth welcomed these new patients. the only problem? more appointments meant he needed more space. that's when dr. petsworth turned to his american express business card, which offers spending potential that's built for his changing business needs. he used his card to furnish a new exam room and everyone was happy.

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you can't beat turkey hill memories. good wednesday morning welcome to another hour of "squawk on the street. i'm carl quintanilla with david faber and leslie picker at post nine of the new york stock exchange morgan brennan has the morning off. we wade through some bank earnings, airline earnings and fed chair powell on the hill around midday. >> quite a bit of news for a wednesday. 30 minutes into the trading session. here are the three big movers we are watching today starting with apple. notching a new record high at the open, new reports saying the company is asking suppliers to

bu build as many 90 million next generation iphones, as much as a 20% increase over 2020 levels. peloton getting downgraded to neutral from outperform at web bush that stock is down more than 20% year to date and we'll end with lululemon, a boost from goldman, a buy rating, saying that post covid recovery period has been favorable for apparel and strong brands we can assume spandex is in there as well. >> it is also day two of bank earnings we have city, bank of america, wells fargo all reporting. wilfred frost has them all for us. >> bank of america is trading, extending its losses, revenues slightly missed estimates, eps did beat, but flatted by one off tax benefit. investors were focusing on expenses, $15 billion compared to forecast of $14.1 billion though the ceo made clear on the call it was a one off and in part due to a $500 million charitable donation.

net interest margin did disappoint as well loans did pick up by the end of the quarter. that meant that they were confident that net interest income had indeed bottomed already, despite disappointing this quarter here is ceo brian moynihan. >> the good news that we correctly caught the bottom three quarters a go. we told you then we thought the third quarter of 2020 would be the trough despite the volatility and significant decline in -- we have been able to hold at that level or more for three straight quarters we expect it to move higher. >> wells fargo and citi foermd b performed better both stocks trading higher w hir both citi and bank of america showed similar trends when it came to capital markets, strong investment banking, declining fixed income trading, by about

40%, that was expected and strong equity trading both stood out relative to yesterday's reporting banks. they're up 30% or so year over year in equity trading bodes well for morgan stanley. the citi call is just kick off bank of america continues and wells fargo starts in about 90 minutes time we'll have brian moynihan on closing bell later today, guys. >> there it is, yeah, good lineup for you you and i were talking about the incredible deposit growth that many of these institutions have seen over the last year. which is reflective of increased savings by u.s. consumers. what are we hearing on the other side in terms of expectations o them making more loans >> on that point, and it is similar to yesterday with jpmorgan, but very clear from bank of america, they were trying to point people towards end of quarter loans as opposed to average across the quarter and in the final month things did really pick up significantly

and they said continue in july that's partly why they're able to maintain their nii guidance, net interest income, even if net interest margin because of the falling yield curve has disappointed slightly. so i would say the tone relative to the numbers we got actually relatively encouraging on that point, though for bank of america itself is not doing enough to help the share price today because of a couple of the other factors. either way, on the headline, about the economy, saying yesterday and today, so far from the one call that we have been listening to, very, very confident that the economy is firing on all cylinders, the balance sheets for consumers and for corporations is strong so you're not seeing quite as much credit extended because of a strong economy not because of a very, very weak economy and people trying to deleverage. >> so far, we went into the quarter, thinking at least about fintech. the degree to which it is threatening the legacy businesses, their interest in ongoing m&a. how is that ranking now in the

list of discussion topics on the calls? >> came up about 45 minutes in with bank of america they had impressive numbers and great single slide on the release which i would point people to in terms of record number of uptick of their app and yesterday interestingly jamie dimon on the jpmorgan call gave brian moynihan a callout for what bank of america has done on that side when he was asked about threats of fintech, saying it is not just from the smaller companies, bank of america has done great work. this is ongoing error, always an area of discussion and the debate now for the big banks like bank of america and jpmorgan and citi and wells fargo is whether they're net beneficiaries of this and the smaller banks suffer more overall. you can't argue with the growth in pay pal, for example, market capitalization, it had a much faster growth than any of the big banks. but if you look at some of the numbers, some of the takeup in their apps, in their digital platforms for the likes of bank

of america today, it is encouraging. it is not coming through on the bottom line, but they hope it will. >> great point thank you so much for monitoring all those calls and staying on top of the many, many bank earnings this week we appreciate it in the financials world, black rock shares also lower this morning despite beating second quarter estimates performance fees a key driver here with broad based inflows except in equity indexes jumping to 9.5 trillion during the quarter. >> i believe inflation is going to be transitory, it is going to be, you know, more systematic over time. and how the federal reserve and how other central banks navigate that is going to be very important. >> as for the impact on equities, he says it really depends on whether ceos are able to pass on those higher inflation costs. >> if we're able to pass on the

prices, and it doesn't change the margins or we are able to create better productivity, which we have done over the last, you know, 20 odd years, then inflation is good for equities if the inflation is going to be absorbed, in the margins, without productivity, then we're going to see a flattening or declining margins. >> crystallizing these inflation views this morning announcing that black rock's active employees through the director level will get offcycle salary bumps of 8%. that also doesn't impact the fact that at the end of the year they will also have their own, you know, end of the year typical compensation discussion, but 8% as of september 1st. >> interesting listen to him on inflation and then we had former treasury secretary mnuchin on "squawk box" concerned that the levels and wondering whether in fact the fed --

>> time to pair back. >> a lot of it comes back to quantitative easing, there seems to be a chorus out there is aing enough of the bond purchases. >> certainly from bullard earlier in the week. mnuchin on mbs and the degree to which -- affordability is worse than 2008. no doubt powell will get pressed on that. how long can you support a housing market when first time buyers are getting priced out so dramatically. >> this question of how you get ahead of this versus just letting it run hot, reacting to it, is the economy substantially different today than it was, you know, in the latter half of the 20th century in a way that it kind of changes how you deal with these things, and i think that's a key question here too as we look at this transitory word that we have been talking about and debating, you know, for months now. >> yes perfect segue to steve liesman who can curtain raise for us, the fed chair today in front of house financial services, with the comments already out

steve, good morning. what can we expect and how do you think q&a is going to go >> think the key is in face of the higher inflation readings we got yesterday and today. jay powell is sticking to his plan to keep easy monetary policy in place. he said the fed will keep to the current funds rate range until employment and inflation goals are reached. the labor market powell says still has a long way to go inflation that was elevated and is increased notably he said should moderate in the coming months it is transitory substantial further progress, the metric needed to change policy, is, quote, still a long ways off the only concession in the speech to critics who say the fed should be moving now was this comment, quote, we would be prepared to adjust the stance of monetary policy as appropriate if we saw signs that the path of inflation or longer term inflation expectations were moving materially and persistently beyond levels

consistent with our goal that's a pretty high bar powell's comments come after higher than expected consumer inflation yesterday, and we got surging wholesale inflation this morning. it also comes as you guys were just talking about, with former treasury secretary steve mnuchin joining larry fink from black rock on "squawk" and saying the fed should be more concerned about inflation. >> notwithstanding my close friend jay powell who i have a lot of admiration for and i think he's done a great job as fed chair, i respectfully disagree with him on his not being concerned. i think it is important for the fed to make sure they get ahead of the curve, so that we don't end up with 4%, 5% interest rates, which would slow down this recovery. we're going to listen with the q&a with representatives to see if they embrace this criticism and concern about inflation. powell enjoyed widespread bipartisan support for his actions during the pandemic.

the recent inflation numbers, though, could represent a challenge to that support. >> he mentioned the word persistently, that's a nod to the critics, it would cause them to change their policy stance, any sense as to what persistently means in terms of a time frame here? >> well, if i could add to your comment, materially and persistently, two bars right there. i think you have to have this 5% inflation running for a long time i think the fed believes that come the fall, these numbers will be headed back down and the fed will have the leeway it wants to gradually tighten policy or gradually remove a combination. i think when they say, hey, if we get a buvnch more 5% readings over the next several months, a big surprise, the fed may change i think right now the banking at the fed is that these things end up coming down and reduce -- and the rates of inflation decline in the coming months

carl >> all right, steve, we'll see what happens later on today. with your help steve liesman. as we go to break, look at the road map for the rest of the hour, starting with delta. reporting results posting the first profits since 2019. >> newly public oatly accused of shady accounting practices and brainwashing by activist short sellers. details ahead. and one of the largest private aviation companies wheels up completes its spac deal, despaccing and will begin trading here at the nyse the ceo will join us later this hour we got a big show ahead for you. st wh ayitus the pursuit is on. the pursuit of outperformance at pgim. with deep expertise to outthink across multiple asset classes, actively managing investments in the world's public and private markets. outscale, with the resources to serve 1,500 clients in 52 countries. and outlast, with long-term conviction

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delta airlines posting better than expected results and you can see the stock is up, though coming off its early highs. phil lebeau has more on the quarter and caught up with the ceo ed bastian earlier today phil >> david, given the number of people who are now flying in the u.s., it is not a surprise that delta beat on the top and bottom line when it comes to the first quarter with the smaller than expected loss and better than expected revenue the real focus is what are we going to see for the second half of this year profitable third quarter and fourth quarter is what the company is expected, the delta variant, ed bastian says it is not hurting their bookings at this point and the corporate travel, that's the real focus, it has been improving, it is expected to be down, just 40 to 45% in the third quarter.

here is bastian talking about the return of the business traveler >> people are still working from home when we surveyed our customers as of last week, over 95% of them tell us that they will be open and back in their offices no later than the end of this year i think that's going to be the big catalyst people that are traveling on business need some place to go >> the other catalyst, international travel that's going to take longer to come back. transatlantic is what delta and other airlines are focused on now. more people are flying here in the u.s., the eu and uk bookings, they're only slowly improving. that's because the u.s. is not allowing europeans to come in. we can go over there, they just can't come back over here. ed bastian says that needs to change the airlines are ready to accept european travelers as you look at shares of delta, one other thing that is going to get a fair amount of attention on the conference call, just beginning with analysts, is the price of jet fuel. up about 2% compared to two years ago, compared to 2019.

what's the outlook for the second half of this year ed bastian is confident it will stay relatively in check carl, back to you. >> all right, great stuff, phil. really great stuff with ed bastian. phil lebeau. for more on the airlines and travel recovery, let's get to gordon bethune ed bastian said as well that the way volume has come back, on leisure, has been, quote, candidly overwhelming. is that how you feel >> well, i think so. and that's really surprising, good news for i think everyone business travel, which shows up in hotel and travel bookings, is not being where it needs to be there is really good progress in the leisure markets and that's helped southwest and others tremendously >> about corporate, he did say business travel may be back to 60% of 2019 by september

do you think that's too ambitious a target given all the new digital tools we have to work with? >> i don't believe so. i think there is some real strong moves as you noted, new airplanes, these guys are not amateurs i think they're making -- they're betting on that return i suspect it is going to be there. i believe it will. >> how about eu? do you see any signs that will loosen up? i guess why do you think it is a one way trade right now between the u.s. and eu visitors >> without being too critical, we have done a better job of delivering vaccines that work around the population, much better than other countries and that disparity shows up in the traffic patterns, but the eu is going to make it back. that's what we're all counting on it is taking longer to get it done. >> now we're dealing with fleet management we have seen some big orders from the likes of united we're waiting for this to

graduate into more of a wide body dynamic what is your view now on how the majors are handling their capacity plans for the next two to five years? >> i mentioned i'm making big bets, but a wise one is betting on the long one, it is the wise thing to do to get that position, you need to be there quarterly to get the orders you want when you want them. they're available now, you better make your bet >> gordon, i want to ask you about airfaresairfares there were major increases, year over year boost of 25% do you think airfares will continue to stay high or is that really just a snap back from what we saw in 2020 when air travel was more depressed and things should moderate over time >> i think it has an effect on recent fare, but the fares are

generally normal to where they were 2019. and the capacity will in fact manage that price level. so without dumping a lot of seats in the market, there is really no reason to decrease fares any further. >> and i wanted to dig into your thoughts on business travel resuming as well you sound like you agree with ed bastian that it will see a significant rebound, but i'm curious why you believe that because we have seen so many reports about people not even wanting to go back into the office, i'm just hard pressed to find, speaking with sources and speaking with executives, people really like the fact that they're not on the road as much as they were back in 2019 and before and so i'm curious what will be the impetus that really gets business travel going in the way that it used to be, with so much resistance, especially on the executive side of things. >> good point. i think reluctantly, though, the tide will move back to where it all -- where travel and it becomes the norm again

i don't think we'll ever be 100% the way we were because a lot of people figured out they don't need that overhead expense but if you need to see the person you're trying to make a deal with, you can't do it by -- for this industry, but to make a deal on a multibillion dollar airplane order or parts supplier, you need to see the people and have the confidence and it just takes business travel to give them that confidence. >> finally, gordon, i got a question longer term about balance sheet management the industry changed now to an environment where you want to hold more cash, i have to believe that it is going to be a high bar to rescue the industry again if there is another god forbid experience like we went through last year. how is that going to change the way ceos think about cash and debt >> i think still cash is king. i suspect that we weathered the

storm with the government's assistance that without the government assistance there would have been a much more devastation in the market and you wouldn't see the travel that you have today but cash is always going to be king and anybody that has been to the airline business more than a couple of years recognizes that. >> you're definitely one of those. always good to get your insight and benefit from your years of experience we'll talk to you later. gordon bethune. >> thank you >> all right as we head to break, check out the biggest gainers on the dow apple among the leaders hitting that new record high at the open up 1.9% today. honeywell showing some gains visa, 3m and boeing as well. we'll be right bac k.

welcome back now time for etf spotlight, looking at xrt in the green today, up about half a percentage point and now up around 50% year to date. one name to watch is elle brands raising guidance thanks to better than expected profit

margins of sales at victoria's secret and bath & body works l brands would not receive any proceeds from a sale stock remains this year's top gainer on the s&p. we're going to take a quick break. stay with us you packed a record 1.1 trillion transistors into this chip i invested in invesco qqq a fund that invests in the innovators of the nasdaq 100 like you become an agent of innovation with invesco qqq jerry is here! j! mate, how are ya!? it's so good to see you. good to see all of you, yeah! why is jerry so... popular? it's been like this ever since we started using workday. what do you mean? it makes it easier to develop great relationships with our suppliers. now everyone, everywhere loves jerry.

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welcome back i'm rahel solomon. here is your cnbc news update at this hour. thousands of firefighters continue to battle fires across the west the grand view fire in oregon is estimated to be almost 6,000 acres in size.

it is now 5% contained 67 fires across 12 states have burned more than 900,000 acres cuban officials have confirmed the death of one man during a clash between protesters and police. the demonstrations began sunday as cubans continue protesting over food and medicine shortages and also high prices on basic essentials among other social issues. iran responding now to the u.s. charging four nationals with a plot to kidnap a brooklyn journalist and human rights activist critical of iran. saying this new claim by the u.s. government is so baseless and ridiculous, it is not worth answering. and pope francis returned to the vatican ten days after intestinal surgery on july 4th the pope had half of his colon removed for a severe narrowing of his large intestine it was his first major surgery since he became pope in 2013 you're now up it date, carl. back to you. >> thank you very much. we're an hour into trading s&p 4380, off the highs on the

dow, by about 100 points session high was up 180. a lot of all time highs with the s&p including alphabet, mcdonald's, nike, starbucks, target today and apple as well >> yeah. apple hitting all time highs yet again this morning you can see there up almost 2% with the latest move giving the company -- right around $2.5 trillion 2.5 -- a little less, 2.5 trillion dollar market value our next guest just reiterated his buy rating on the stock, says consensus expectations are too low. jim suba joins us to discuss looking at it there, jim, give me the answer as to why you believe consensus estimates are too low? >> well, david, great to see you again. and i do believe consensus are too low for a couple of reasons. the iphone and ipads and macs are still selling well second of all, they launched something new this quarter that many people don't realrealize, airtags. they're little items that help

you find your house or car keys, purse, wallet, backpacks and when people buy those, apple is marketing this beautifully. you come in and buy the airtag for $29. and then you spend more than that on a key chain or a loop or an additional accessory like with the apple watch you buy the watch and buy additional bands these accessories are catching on the wearables are going to be a big surprise to people this quarter. >> interesting now, listen are , i don't want make light of the wearables. but hand sets drive the show here what are your expectations on that front >> it is you're exactly right we do expect that the -- first of all, the channel inventory, what is in the carrier stores and the retailer stores is not an optimal levels yet. and they still have to replenish that we know about all the various supply chain issues which hit them and importantly in the month of september we do expect

them to launch the iphone 13 expectations are pretty low. we don't expect a lot of big changes for the iphone 13, but we actually did an analysis that shows that apple stock works better in years when there is not a big wow product. when those expectations, david, are low, the stock does better and we think that the iphone is still going to be a driving force behind this, and people will be surprised the resiliency and replacement rates and the new people that are adding to the iphone ecosystem the extreme beneficial customer experience that simply works and works well and maintains your personal privacy, people are liking that more and more. >> jim, i find that interesting, this idea that when people don't have tremendous expectations going into an iphone launch that they tend to be wowed in the aftermath. why is that? what are typical things that do tend to wow investors and how is it that that's not already

priced into the stock at this point in time? >> leslie, it is a great observation and i can tell you t that when people get it in their hands, in their homes in their ears and they're wireless or they're using them and they monitor their heart rate, they're starting to become more active and lose weight and be more fit, those are the consumer experiences that i talk about that is an extreme high quality of exceptional experience. that's what wows people, the entire apple ecosystem or platform as we call it of once you get it and use it, it not only, quote, just works, but people have fun and they're, like, wow, i didn't know i could do that. all of a sudden, this is circle feeding of this gets better and better and better. it is not so much the number of cameras or the number of lenses, or the megapixels, it is more the entire ecosystem and once you get it in hand, in your house, in your home, and with your friends, things simply just

work and it is that, the r&d that apple has been putting a lot into. >> on these phone production forecasts, one of the narratives that is starting to spool up now is the idea they're winning share in key geographies can you be more specific on some of that, who do you think is getting squeezed >> that's a great observation. and i would say, you know, to your entire team, in the united states, we're very familiar with it when you go to other countries, a perfect example is india now, our hearts go out to all those struggling in india and the country with covid, but when we look at factually and remove covid, apple has less than 2% market share in india. apple doesn't exist much in india. they don't even have an apple store in india in the future, we expect that would be a large country, which has about a population of about 1.3, 1.4 billion people and years ago, i remember talking, you know, carl and david and

your team, a decade ago, when the pushback was apple won't do well in china because the price points here now today we look at apple doing very well in china, so we see india being a very big footprint of future opportunity for apple in the years ahead >> yeah, jim, let's talk about fundamentals a bit the numbers themselves are staggering $2.5 trillion market value these ebitda numbers you for 2021 estimates, 116 billion, the numbers can't even imagine them, but let's get back to -- it is going to trade at 20 times can the multiple expand both the ebitda and the earnings multiple from here, is this appropriate sort of where we are right now >> david, there is two points that cause stocks to trade higher mostly is, a, the valuation, can it expand, as you asked, or can earnings and revenues accelerate we actually see the valuation is generally fair, we do not expect

the valuation to expand. i wish i could tell you, david, it was going to expand, but we don't see it expanding what we do see accelerating is the revenue and sales upside and that's why the consensus is too low. with that, we think the upside of the stock is going to be from the fundamentals of sales and earnings and cash flow and not from the market revaluing this higher on a multiple perspective. >> got it. jim, always appreciate it, thanks >> great to see you all. happy summer. speaking of revaluing china's recent crackdown in the market cap of some of the country's biggest tech giants, seema mody is looking at the names, now is a good time to buy at a discount. >> that's the question, leslie if you look at the biggest names in chinese internet, alibaba, baidu, together they have lost over $500 billion in market value since their february peak and with the sell-off, multiples

have contracted. you take a look at alibaba, trading at 19 times earnings, below its historical average of 24 times baidu, jd also trading at a discount to their respective averages even if you look at other valuation metrics used on wall street, for 2023, chinese internet stocks all trading below their longer term average. james lee managing director says investors recognize that valuation levels are compelling, but they're waiting to see if the regulatory announcements out of china start to slow down, especially when a major political event like the one we just saw in china occurred looking back at history, lee does say that these regulatory cycles in china appear to be transitory if you look at online payments in 2018, when china's central bank required platforms to report directly to them, that took three quarters to complete and then regulation around medical ads in 2019 asking companies to provide a license, that took about one quarter to

complete >> seema, thank you for that seema mody. when we come back, wheels up, completing the spac deal at the nyse we'll talk to the ceo after the break. dow is up 5 5 now. ok, at at&t everyone gets our best deals on all smartphones. let me break it down. you got your new customers — they get our best deals. you got your existing customers — they also get our best deals. everyone. gets. the deals. questions? got it. but, why did you use a permanent marker? because i want to make sure you remember. i am going to get a new whiteboard. it's not complicated. only at&t gives everyone our best deals on every smartphone. like the samsung galaxy s21 5g for free. ♪ ♪ ♪ digital transformation has failed to take off. because it hasn't removed the endless mundane work we all hate. ♪ ♪ ♪

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a long-term market bull sees a period of volatility toward the end of summer. does that present some bigger buying opportunitys? get that list on trading resqwkn e re" m. mo "ua othstet coming up.

♪ ♪ experience, hyper performance that takes you further. at the lexus golden opportunity sales event. get 0.9% apr financing on the all 2021 lexus hybrid models. experience amazing. the world's first fully autonomous vehicle is almost at the finish line what a ride! i invested in invesco qqq a fund that invests in the innovators of the nasdaq-100 like you become an agent of innovation with invesco qqq this morning, wheels up became first private aviation company to be traded on the new york stock exchange, closing its transaction with aspirational consumer lifestyle corp. it will trade under the symbol up look at shares this morning. joining us is kenny dichter, long time of cnbc, wheels up founder and ceo. kenny, what a journey, con

congratulations. >> thanks, carl. great to be here with you and the team an american dream. anything is possible in america. if you can dream it, you can do it. >> we were talking during the break about when you first brought this idea to us, you were talking in the space for so long, did covid give it sort of a huge after burner rocket boost, has this been a slow burn all along the way? >> a slow burn, you know i've been doing this for 20 years now. and i've been democratizing for 20 years i think covid accelerated things, we were on an up trend all the way through and to be here at the new york stock exchange ringing the bill on behalf of our investors our partners, our pilots, our employees, is just, again, if you dream it, you can do it. >> i give the viewers a sense of growth here. let's see. q1 revenue up 68 >> yes, first quarter revenue up 68 even more impressive maybe, new member growth up 56.

we had a great quarter $261 million in revenue. which if you annualize that out, a good run rate for us and really, really exciting times. >> where does the growth come from talk to me about the kind of consumer you think you can target and whether or not there is eventually a limit to that kind of person who is willing to pay up for this kind of convenience? >> the great news is, ed bastian mentioned it this morning when he did his -- >> he said shoutout to kenny d. >> we did that delta airlines deal and i did that off market with ed, first class, business class, business customers, the delta group of people, that just takes your addressable market really all the way up to the sky, and vice versa, wheels up has a situation where our customers, 80% of our customers fly commercial so it is really about the addressable market and a democratization which gives us that lift and allows us to be a much bigger business in the future >> last year during covid, there was a squeeze on equipment,

right? difficult to get a hold of a private jet for a while. is that still the case >> our pilot force and our team stayed in place all the way through covid. we have 170 planes in our first party business, which is on and out. we have a management business, a second party business, 170 planes, over 1,000 pilots. we're not in the brokerage business, but the future of our business, carl, leveraging technology we hired greg greeley the chairman of the marketplace. he created amazon prime with bezos. this is going to look more like uber and airbnb than an airline. >> interesting all in the air, though are there other modes of transportation you want? the name is wheels up. >> anchors up. you may have an opportunity in the yacht space. villas up. i watched branson, i watched musk, i watched bezos. how about space up we may need to go into space. >> david has a question.

david? >> sorry, i'm not over there with you, but, you know, we just showed the stock price are you a little zpdisappointed you're trading below 10, not great for a spac that is despaccing why is that the case are people not fully understanding the story yet? >> i would say, look, i'm in it for the long haul. we opened at 11:35 we have a lot of folks that invested in this business early on and if there san opportunity for us to bring an institution, we have t. rowe, fidelity and franklin templeton backing us. this is a healthy conversion of who owns the stock and i think that, look, we got the closing bell today that we're ringing. and i think we'llbe in great position there but i'm looking at grinding this thing out quarter to quarter, and delivering i'm not ever going to worry about the stock price on a day to day basis look, we have an implied value of $2.5 billion from a power point eight years ago. so up a nickel, down a nickel,

up 50 cents, down 50 cents, i'm not worried about it the stock price will take care of itself in the long haul this is probably the best place to enter into the wheels up family so we're looking for great short-term, medium term and long-term holders that believe in us and we're going to stand in there and deliver for them. >> look at that, ken you speak and the stock turned around see that you are the best salesman. it is incredible retention rate, as we look at it, the stock is up, talk to me about that you had almost 90% for members whose annual flight spending exceeded 25 grand. can you keep that up and what, you know, at what level do you see the highest retention rate among your customers >> very simple 25,000 is a very modest spend in private aviation we have a90% retention rate with that group. at people fly more, the retention rate goes 91, 92, 93, 94 our programmatic retention rate for the whole business as a whole is 80. we think we can move that.

we have a lot of people that joined wheels up that spend between zero and 25. that's a group we're working on segmention we started with our core membership we have a connect membership at 2995 i think we can bring the whole programmatic retention rate up and think we can get into the netflix, amazon prime range over time >> your stock price since you've been on clearly going up as your ticker symbol would suggest, now 11%. before this interview, i was looking at your filing with the s.e.c., and you mentioned you were granted $76 million through the c.a.r.e.s. act payroll support program. what does that mean for your ability to sell additional shares, to repurchase stock, to lift dividends, to pay your employees and your executives? >> very simple we -- when the c.a.r.e.s. act came and was available, you know, when you have 10 million

retirees in your equity and they were private investors, we had no choice other than to take that bridge and roll with it, we're very, very carefully making sure that we can comply with all the the c.a.r.e.s. act story. i think the government had it right with the ppp and the airlines and companies like us that are vital, that are backbone there is over a million people that work in our space, $235 billion worth of annual coverage i'm very thankful that that plan was put in place and bridged us to where we are today. >> by the way, we got a trading hold now as we are at 11 so as you're talking, we'll see where it reopens as people make news. >> i would say i'm most proud of our meals up initiative, we did with feeding america we felt into this crisis, we were so fortunate that we had a business that we partnered with feeding america, came on cnbc with russell wilson and sure enough now host a match with brady and mickelson, rogers and

desham bow, now over 60 million meals there. while we're doing good on the business front, i think every ceo and business has a responsibility to do some good in the world. >> for all the spac skeptics who watch us every day and somebody who has been through the spac tunnel from beginning to end, can you talk about the pushback you got during that process and whether or not now there is an effort to prove it can work? >> i would tell you the spac vehicle was perfect for us we partnered with robbie tockran and a group of folks who had experience for us we got to self-select our new investors. we had about 35 meetings in our zoom road show we landed at 27, 28, great investors. so we got to arrange this. and coming in today, we already knew it was by appointment we had all the capital raised, over $650 million. we had a $2 billion premoney valuation, we're now 2.5 plus. and with 11 bucks i think we're

maybe 2.6, 2.7. i think it is prosecute vehicle for us it is not for everybody. i'm a believer in the spac vehicle for the right company. look at sofi >> yeah. indeed we talk to a lot ke ke kenny, congrats. >> great seeing you too. keep doing what you're doing here at -- it is it's always exciting tv for me >> kenny dichter, thanks a lot. on "tech check" today, apple sets sights on buy new save later space. one of the biggest buy now pay later partnered with h & m and more 11:00 a.m. eastern time. we'll be right back. don't go away.

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shares trading lower today on a new short report out. you can see shares down more than 4% right now. the short seller claiming 124-page report that the oat milk maker has been overstating revenues and green washing the environmental footprint. now, oatly went public just two months ago at $17 a share. spruce point founder telling cnbc.com he believes the stock

price could be 70% overvalued. this is not a heavily shorted name with only 1% of shares shorted as a percentage of float. we'll see if that changes after today's report cnbc has reached out to oatly for comment. we're still awaiting the company's reply, david this is interesting not because of the accounting allegations and so forth, but the green washing aspect of this as we start to see more companies going public with this kind of esg bend to them, will we in turn see more short sellers quick to point out their environmental footprint and how it stacks up relative to their per spect us. >> it's a great point. we have yet to fully create data that accurately reflects the efforts by companies to lower their carbon footprint you can certainly make plenty of prognostications about and/or promises that we will be neutral by this period of time, but leslie, it will be interesting

some companies are very much wrapped up in that others are saying, okay, we'll try to reduce our footprint, but many are wrapped up in and it's important to their shareholder base in part by even for the reason they're buying the stock. >> right that's the best point of all which is the fact that these prognostications regardless of kind of the data and the quantification methods that they use are clearly reflected in these stock prices and so, it's not surprising that you do see a short seller come after that. >> very interesting. later today, you're not going to want to miss this, th wd,:0e with ark investments caieoo 40 p.m. eastern we'll be right back. ♪ ♪

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stocks are charging higher as the fed says it will maintain its easy monetary policy, keeping interest rates lower for longer that helped drive the s&p 500 to a fresh all-time intraday high, still up one third of 1% the technology sector in the lead again today it remains the best performer over the course of the past week and one-month period as well ship stocks doing quite well

the smh, etf that tracks that particular industry group up over 1% after hitting a new record high of its own today those gains led by names like skyworks and st micro electronics, qualcomm as well. by the way, apple also contributing to the momentum the iphone maker is reportedly asking suppliers to build as many as 90 million next generation phones that would be a 20% increase over 2020 levels, that's according to a bloomberg report financials leading to the downside, falling in tandem with that ten-year treasury note yield as you can see there after fed share powell said tapering is bond share purchases is aways off. back over to you, guys, david. >> dom, thank you. yeah, that apple market cap is right at $2.49 trillion. speaking of moves and stocks, take a look at shares of wheelsup we were talking to kenny dichter. stock had been trading below the $10 price.

the moment he started talking about it or answering that question, it ran hit as high as 13. it's now up 20%. that's power cnbc. let's call it that, at least that will do it for "squawk in the street." "techcheck" starts now ♪ ♪ good wednesday morning, welcome to "techcheck. i'm carl quintanilla with john fort and deirdre bosa. wall street is bullish on apple as the stock hits another all-time high today. plus, cathie wood warns of a major megacap slow down and bails on chinese tech. facebook joining in with amazon asking the ftc chair to step away from its own anti-trust