hour it could signal relief in sight if you are struggling to buy a home it is tuesday, may 10th, 2022. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc live from the nasdaq market site from times square. i'm rebecca quick along with joe kernen and sorkin sork look at u.s. equity futures seeing a rebound after steep declines that added up over the last week and a half the dow futures this morning indicated up by 217 points s&p up 32. nasdaq up 165. this comes after a very

punishing day yesterday. driving the indexes to the lowest levels of the year. s&p closed below the 4,000 level for the first time since march of 2021. nasdaq down 4% for the day yesterday. it is down nearly 26% year to date the dow is now down by 11% for the year let's think about it the big technology names down more than 26%. if you were looking at the last three trading sessions, massive declines more than $1 trillion lost if you add up from microsoft, tesla, google, nvidia and facebook that tells you the panic that set in with the levels we are starting to see green arrows across the board. also with treasury yields. treasury prices coming up and yields coming down that was surprising. yields down, but the stock market down at the same time. >> it used to be the big names,

favorites, were holding up now some of them are down 40% and 45%. some of the most -- >> stalwart companies with profits. >> right the average nasdaq stocks are down less than the ones that used to be the top ten maybe that is a good sign of how deep this really is. we'll talk bitcoin now, andrew i was thinking ark if you feel bad about bitcoin. if you are in ark. >> double and tripleing down >> ark is down 68% from its high who is not under water is anyone not under water than ark? >> we will talk to robert frank later, not about ark, but art. art is not under water >> we talked about marilyn monroe a lot this week

the dress at the met gala. he made five of those. that was smart is that $1 billion >> not for him >> no. if you add it up >> if it was an nft, maybe he would get a piece. bitcoin for a second cryptocurrency briefly dropped below $30,000 late yesterday it regained ground early this morning. we're at $31,449 bitcoin is off 55% from the november peak and 44% of holders are now under water on investment that is data out from glassnote. in the last month alone, 55% of all bitcoin wallets fell into unrealized losses. >> i thought it might have been more there's hodlers holding for longer than that

40%. it was at 66 you would think it could be worse in terms of the number of people that have an unrealized loss. >> how many people have owned? 10,000 20,000 >> right. >> i don't have a single one that i bought higher than what it is right now. i don't own a lot. i don't have a lot i have those i have one at 4900 stocks to watch. i'm supposed to disclose i own it >> you do? >> i do. after not saying anything for two years. stocks to watch. amc rising the adjusted loss of 52 cents a share. that was 11 cents better than expected sales came in five times higher than the same quarter a year ago as movie goers continue to return to theaters on the conference call, adam

aron said the mining -- no the company is gaining strength each day and promising we will soon be back to normal can you mean popcorn >> you can sell it >> when is the mother of all shorts happening, joe? >> the mother of all shorts? what do you mean >> mother of all -- right. this is the moment remember the people buy -- apes. $77 a year or two ago this is supposed to happen >> they are not bored anymore. these are different apes these are very excitable apes? >> very excitable apes who thought they were making money on their position that they

bought >> 13. okay you are not trolling them? not people you want to mess with you don't want to mess with apes on either end. nft or amd >> mother of all short squeezes. >> i'm sorry >> that's right. >> who came up with that someone came up with that? >> that was in the concept of gamestop >> no. originally it was -- when someone actually coined the term mother of all. that was further back. i'm trying to remember the exact context. >> mother of all >> shares of vaccine maker novavax are plunging missed estimate by 13 cents.

>> saddam hussein. >> he overstated things a bit. and novavax reported the first profitable quarter thanks to the vaccine rollout. speaking of saddam hussein, i was reading the stuff putin was saying yesterday hemarbles. >> or he thinks he can make people believe anything. >> i was just reading it shares of upstart plunging it cut the forecast for the full year warning that the macro environment would weigh on loan v volume the revenue range is short of the $335 million analysts expected that guidance is overshadowing it was victory day over world

war ii he is drawing all the parallels like it is the same thing happening today. they had to preempt. >> victory day they originally thought he would say he had taken ukraine. >> he did not say he was going to ramp thing up either. i don't know in the meantime, the picture we had been talking about. andy warhol's picture of marilyn monroe sold for $195 million at christi's last night becoming the most expensive work of the american art ever sold. a bold opening salvo for au auctioning season. they plan to sell $2 billion of art in the next two weeks. the buyer of the piece was not identified we will talk about valuation in the art market in the next hour with robert frank. interesting timing to have this happen as the market is crashing that money, that wealth effect, drives up prices

>> it is nice. i don't -- the brush strokes i'm not sure how to interpret what is going on there are five of them you know why it is worth so much if you have one of those, there is not a single person that doesn't know what that is and who painted it part of it is the cache of something recognizable it is worth a lot. i paid for it. >> if i saw it on your wall, i would think nice -- >> you would never believe it. >> nice fake. >> is it that much better in terms of pure art talent >> art is in the eye of the beholder >> i'll have one ready by the end of the show. it will be inn distinguishable it helps if you are an artist. >> yes no more coming.

coming up, making sense of the market moves we will talk to two strategists named kevin. one is a bear and the other is a cautious bull. that is confusing. using the initials of their last name. later, the ceo of mattel will join us to talk earnings and inflation and the reports of the buyout talk with pe firms. you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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call today. after weeks of wild market swings, is it time to buy the dip or is more pain in view? we have kevin nicholson and kevin simpson. okay kevin and kevin, let's see who wants to start should we get the bad news out of the way first or good news? let's get someone that maybe gives us a glimmer of hope i think kevin simpson. >> joe, i'll take the bull out of the argument. you called me a cautious bull. not a raging bull.

we have seen devastation across the board. the innovation stocks down 40, 60, 80%. nasdaq in correction territory down over 20 i think even the s&p is down 16 or 17% from highs. when you get to the levels, you start looking for opportunities. as active managers, kevin and i have to do that. we have to look for opportunities in any market. volatility certainly breeds opportunities in this market >> kevin nicholson, you have been slowly getting disillusioned. what would you say the evidence is in and you feel like this is some serious trouble that financial assets are facing right now >> good morning, joe i was in the cautiously optimistic camp last week until the fed came out with the dovish rate hike. what that led me to believe is the fed is falling further

behind the curve and they will have more work to do when we look at the three bulls we follow, it is don't fight the fed and don't fight the markets and train. we are obviously fighting the fed. the trend on the s&p 500, the 200-moving day average has been decelerating now about to turn negative now that is another thing. last week, we saw earnings resci revisions come down hard they came down by 2.45 puerto rico -- $2.45. we are talking about $225.06 earnings we move into 2023, they came down $2.01 it is, you know, it will be a tough time i think we also had a retracement of the november 2020

rally to the highs we retraced 50% of that. it really makes it very difficult to be totally optimistic anymore >> kevin simpson, you point out that rates are going up. some of the story stocks that had revenue or didn't have the solid fundamentals valued so highly they are coming down it doesn't mean companies that are profitable and assign a multiple to it that is not completely out of whack, maybe that's a place where you can be selective and at least put some money on it. the sentiment is finally getting negative you are reading articles that now say you have a long way to go dow is down. no sign of bottom. i'm seeing all those right now that was missing for the last month or two those types of articles. >> doesn't that give us a

glimmer of hope? you fight the trend when people get negative and it is time to look for opportunities you look at fundamentals which matter the idea of private companies or public companies that you can price on revenue and sales is an idea whose time which certainly has passed kevin's view is valid. i'm not calling for capit capitulation if markets go down to 3800, that is 5%. we are getting to the point where you have to look for opportunities. joe, you are talking about stocks like goldman sachs. the valuation is pretty good stock came down from 400 to 300. again, looking for opportunities. we are not calling bottoms pays over 2.5% dividend. the best part of the story over the last five years, goldman sachs had average dividend

increase of 20%. that's a cager compounding annual dividend growth give me a raise of 20% every year get me an evntry point here. that is a stock i believe can make investors some returns. that's the case for goldman sachs. >> kevin, what is the beginning of the all-clear sign for snu. >> that is the meaningful reduction in inflation that is the key for us that's why right now what we are trying to do in our portfolio is get paid to wait what i mean by that is we are looking for a low dividend or dividend paying stocks that are low volatility we are going to have covered call strategies in our portfolio. we are going to buy short-term fixed income think about this just a few months ago, everyone

kept saying there was no other alternative to stocks. that was because the dividend yield on the s&p 500 was close to that of the ten-year treasury in some cases, it was above that now you are talking about a ten-year treasury yielding over 3% and the dividend yield on the s&p 500 is at a 1.56 it is almost double. that's why we're being more cautious right now and we need to get paid to wait. >> all right that just occurred to me you're right, guys think if you were the fed and they told you, you need to keep unemployment as low as possible. two things you need to do. keep full employment and you need to make sure there's no inflation. the way you make sure there's no inflation is by raising interest rates to slow the economy. you have to keep employment. it is impossible

those two -- >> that's why when we spoke yesterday to neel, he admitted the inflation is the only card that is what greenspan said. if you take care of the inflation picture, the rest takes care ofit self >> three mandates. can three be mutually exclusive? kevin and kevin, it sounds like seals & croft. kevin and kevin, thank you we will do this again. take it on the road. good to have you both on >> thanks, joe okay when we come back, we have more as we try to figure out which way the market is headed we will show you housing data released this hour showing a big shift in the supply of homes on the market. this may have some impact on people's thoughts about what is happening here diana olick will have the details next. later, you don't want to miss this. we talk tech with alan patricof.

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welcome back to "squawk box. we have news this hour signs of the big change in the housing market it could be good news for buyers diana olick joicns us with more. what is the news >> andrew, it depends where you are sitting. supply of homes for sale could post the first year over year

increase in three years. that could happen in the next few weeks. that according to the just released report from realtor.com. inventory was 12% lower in april. that was the smallest year over year decline since the end of 2019 another reading that covered just the last week in april showed inventory down 3% from a year ago realtor.com's chief economist said april data suggests a positive turn of events is on the horizon for weary buyers not for sellers. weaker anffordability is creatin a slow down in the bidding war and sales. this is due to the drop from sales thanks to the spike in mortgagepricer the 30-year fixed jumped 2.5% points the growth in supply is led by

mid sized family homes as fewer are going under contract despite the popular spring market when those homes usually sell the most andrew >> diana, i don't know if you heard the interview we had with neel yesterday one of the things he was looking at was this issue. at least that will be built into his new equation, if you will. what do we have to do? you need to get the overall number just down, down, down you have to effectively hurt the housing market for neel to be happy, right >> well, look, i guess you have to get prices down a bit they are overheated. you have to improve fo affordability. we have slow construction numbers because the supply is going up why is the supply going up in the new homeis expensive

i don't know whether that is good or bad news depending if you are a buyer or seller. to get more people in the market, you have to get home prices under control >> diana olick, good to see you. becks. thanks, andrew when we come back, we talk about the tech route with the markets. and coming up, we have may as the asian american pacific islander month here is william lee. >> my parents wanted me to be the middle class by becoming an engineer i never wanted to disappoint them i knew engineering was not something i had a passion for. my mother was disappointed i switched out of aengineering.

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good morning welcome back to "squawk box" live from the nasdaq market site in times square. let's check out the futures. we're up don't do the math though it will be a pretty good morning pre-market session if we hadn't had the last couple weeks or months up 258 points on the dow that's okay. the nasdaq -- the nasdaq, if you follow closely -- got your attention yesterday.

500 points there are protesters which are not meek here. this says squidewalk closed use foot walk. take that under consideration. >> that guy wants to get on tv. >> it is not incendiary. >> oh, no. here is ed >> you will have hell to pay. >> let him come on tv for a second >> no cursing. >> this is very pleasant compared to what we url lyusualt >> there's the heavy >> oh, well. >> that's our guy. former nypd. finest yeah >> you know who needs security these days he says he needs security. >> according to him. elon musk says he needs security you saw the tweets

elon musk saying the plans are in agreement with the eu social media rules. a fascinating turn here. the ghuidelines forced to align illegal content. it led to speculation he could relax the company's content moderation rules as we know, the european rules are actually particularly strict and a lot of people raised the question whether that would fly in the face or make it less desirable to own twitter or what he could do with it. meantime, tesla shares continue to go down twitter, right now, 47.60. the play is still on in a big way. i don't know if you think it is less likely that this happens. i think he is serious and wants to do it i don't think there is any question about that. >> he is committed >> he is committed

it's true. if the stock gets down in this environment, i don't know what you think is happening if you think the stock goes down another $100 or 200 a share, this will get complicated. >> the other thing is trevor noah did this bit over the weekend where he was talking about how elon musk realized gains and pledging shares. i thought about it elon musk sold $8.5 billion to pay for this he will have a big tax bill coming due next year he will not get off without being able to pay taxes on this. >> maybe we subsidize. we're doing well >> if you think the tesla sales are done and pledging that unless he sold for the taxes, he will have to sell for the tax bill for the realized gains he had when he sold those shares. >> you got to think of it like

ron barron or cathie wood. if it goes down another 200 points like you said, then it is suddenly what was $1,000 stock for whatever that could end up being something that -- >> what about the financing? i wonder is that what you go to, andrew >> there is some speculation and we don't know, obviously, but the shares that he sold and the $8.5 billion were recent shares that had been restricted shares that had come due. because of the basis, there will be very little taxes on the shares already >> why they were recent shares so the run-up wasn't as big >> these wouldn't be selling shares that he had been granted from five years ago. >> i guess what was the strike

price? that is income. >> it's income >> it's taxed as income. like you are given shares. >> i could sell stuff that we get here and that doesn't help that much if comcast is down a little you've seen that when we agree on something wait i thought i had this oh, yeah uncle sam. enjoy. use it well, please. you have taken half of it. it's all right >> we will see it is an interesting question. one thing is i don't think he gets out without paying taxes on this for the realized gains. >> he has been good. i wish we had a gazillion loss. when we come back, we talk about the selloff in stocks with the invvest ors and we will tal yoout the supply chain and

buut talks with pe firms "squawk box" will be right back.

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tech stocks continue to get slammed after the selloff this this week. in the last three trading sessions alone, the biggest companies in technologies have gotten smaller shed a total of $1 trillion of value if you add up seven names. joining us now is alan patricof.

alan, the pain we have seen at this point, these are the companies that actually have profits that have been leading the way higher down so significantly. is this throwing the baby out with the bath water? is this wall street rewriting or rethinking >> becky, i have been around a long time and this is another in a long list. i don't think we know yet whether this is the bottom i took a look in preparation for today which i have not done in a long time. computed pe ratios which is interesting to me. facebook or whatever you want to call it. 15 pe. apple is 25. alphabet is 20 zoom is 20 amazon were off the site that's 52. netflix is 16. what's happened is, you know, these companies are coming into

a more rational pe ratio financial structure. as a great mentor of mine once said a long time ago and i repeated this. when i love roman haas and it's a great company. when it goes down, i love it twice as much. for those whoanalyze these companies, that is a more normal ratio. i have not seen that in a long, long time. i would say i don't think there is that much more to go. we are fighting all of the obvious. inflation, covid and ukraine and china. you add the list up and on the other hand, we have good offset. low unemployment it's a confusing picture out

there. confusing pictures and markets usually go down. >> alan, you said a couple of things it sounds like you are saying there is a good buy if you know the company well and if it is profitable and if there are ways to look at metrics andsay this is a company i understand. you also said that valuations are more rational now which suggests they were irrational before >> exactly exactly. i think we're getting into a level -- i have been preaching for a long time this market has to see a blip here everybody i run into has only seen the markets since 2008. maybe a few around from the great bubble most of them have been riding an up market for 20 years it's really -- this is now getting to feel like, you know, what's expected. >> that's suggesting you don't think we are taking off from

here >> i think there are too many factors to take off. on the other hand, the worst could be over. what is interesting if you don't mind the recent comment on twitter, i said last week or the week before, he was buying twitter right into the face of r heavy regulations pending in europe and in congress and senate which would fly in the face of what i thought musk wanted to do the fact he will comply with the european rules, you know, all of these companies should have taken a positive attitude four or five years ago and seen the handwriting on the wall and brought into compliance to avoid regulations. instead, this theey wanted to ft it there is a chance we will get legislation. the lobbyists are strong on this

area. >> you don't think it is a good buy? >> it is not that. in the case of twitter, i was not in support of musk, one person in control of a social media company like twitter, which has enormous impact. saying he is going to come in compliance with the regulations pending on the gma act or cma act that passed in the eu two weeks ago. it says he will run this thing according to the rules and not try to be a cowboy i'm encouraged by what he is saying what he will do with twitter only he knows. >> alan, let's talk broadly about the changes in technology. if you don't have the free money flowing in and you have to be more concerned as every one of the companies has to follow expenses and be careful to make sure they are putting out

profits and numbers wall street will like at this point. what does that do to innovation and how is it different? does the investor dig through? >> i don't think it will make the slightest difference they have money to spend on research and development >> netflix >> oh, netflix has had, you know, a wild ride. >> uber and peloton. >> i believe that companies can survive ultimately forever with shareholder money and new financing. i believe sooner or later, you have to have some bottom line. we may be going into the period where there will be focus on the era of pe instead of evida you may see metrics come back in place if warren buffett is not cra crazy. >> i'm suggesting the content. all of the things with the wild

money gotten used to because our money was cheap. there was so much liquidity out there then that will have rolling impact in the economy. >> i'm a big content consumer as you are. both on tv and the movie theater. we have been rolling in content for the last five years. netflix was the leader obviously. it is now in a crowded area than making a lot of product. you can see a wookie on new york streets. you know how much content is being made in the one city we're not necessarily the capital of making content. i think there's a lot of content. that means you have a lot of eyeballs to watch it people have a lot of time to watch all of the content you know, i think we will see perhaps with david zalaznick

i heard he moved to california obviously he made the acquisition. he is serious. he is a more cost conscious guy. you will see that company at least being more cautious if what they will spend we have a lot of content. >> alan, i'm curious in terms of acquisitions given this environment and had this goes to the pricing issue of how people should think about the public market and private market. all of the companies that will run out of capital, get bankrupt or get bought, if you are selling in the environment or selling in the secnext 6 to 12 months i'm thinking of the car companies that would not make profits for some time. i imagine they will become takeover targets what premium do they sell for? >> that is hard to get at, andrew i'll get back to the statement companies cannot run forever on raising new shareholder capital.

at some point, the emperor has clothes. i think we had proliferation of startups in a lot of areas perhaps too many i think you will see a rationalization. will the prices in premiums be lower? that is the normal effect with people who need to sell and buyers are limited you have to have at least two potential buyers to get something going in terms of pricing. >> alan, always good to see you. congratulations on the book. we look forward to seeing you again soon >> thank you when we come back, more on "squawk box. we dig into the selloff of bitcoin and new report that says 40% of bitcoinnvto iesrs are now officially ly under water that's next. offers investors a broader view. ♪♪ we see companies protecting the bottom line by putting people first.

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welcome back to "squawk box. crypto facing one of the biggest

selloffs yesterday with bitcoin reaching nearly 30,000 joining us right now to discuss more of all of their is founder and ceo of the chamber of digital commerce and the off the chain capital partner. good morning to you. >> morning >> what's your sense here, and what's your low? what's your high what do you think's really happening? >> look, bitcoin has only been around for 13 years, and this is the first time that the coin is experiencing a fed tightening. and what we're see something bitcoin as well as the larger crypto markets respond like the stock market, at least in the short run. look, andrew, everything is down the stock market's down. the bond markets are down. crypto's down. their this is the wall street mantra. investors are selling their assets, including crypto, to get

more conservative, but what's different about the crypto markets is they're open 24/7 they don't close they're more liquid than other assets and we saw selloffs yesterday. >> i'm curious about whether you think that this upends the argument that this is an inflationary hedge and/or that this is a store of value >> yeah, look, we're currently seeing bitcoin respond similar to the stock market, at least in the short run. however, market correlation over yearly periods show that bitcoin is not correlated to the stock market so, in the long run, we believe we will see the true value of bitcoin emerge, because it's valued as a network. the more people that use it the more val uable it becomes, no matter what the fed does >> i don't understand that because i think if we put up a chart of the nasdaq and bitcoin

together, they'd basically look like the same thing. >> in the short run. in the long run, it's, it's correlation to, to the stock market is .06 if you're looking at correlation over yearly periods. in the short run, people are treating it like a traditional asset, like a stock, which it's not. but we should be focussed on what is the value of bitcoin, not the price. and we have valuation models today that show us bitcoin's fair value is between $48,000 and $140,000, $180,000 and these models are 91% to 99% correlated to the 12-year historical price of bitcoin. >> so you, i imagine you'd be buying bitcoin like a crazy person if that's correct

>> we see this as a massive buying opportunity currently. >> are you buying, personally? >> i, i mean, personally, yes. i do see this as a buying opportunity. and you know, any extra liquidity that i have, absolutely, goes straight into bitcoin. >> goes, at this point, goes straight into bitcoin. what do you think the possible low could be >> i mean, it seems like prices are leveling out but i mean, again, you know, we think bitcoin today is valued between $48,000 and $180,000 we're very focussed on what is the value of these networks, what it's worth, not what is the price in the market. >> thank you great to see you this morning. you think it's worth $48,0001 t

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good morning, and welcome back to "squawk box" right here on cnbc. take a look at futures this morning. we finally have a little bit of green on our screen at the moment we'll see whether it holds up. about two and a half hours to go before the market set to open after what has been a wild ride these past couple of days and weeks now. the dow up about 214 points. the nasdaq looking to open about 153 points higher and the s&p 500 rooking to open about 43 points higher. if you want to look at the ten-year note, we are sitting right around, as we put the board around, right around 3%. but before we continue on, we want to get straight over to dom chu who's got some of this morning's biggest market movers,

dom? >> the rebound, as you point out is what everyone's watching to see if there's legs at all to that kind of bounce back that we're seeing in the futures earnings there are catalysts driving right now. we're watching share of planet fitness, the big operator of gym and fitness facilities across country, geared more toward the budget conscious up about .75%. e earnings come in better than expectations it's viewed as that reopening trend. i'm showing you a three-year chart so you can see the pandemic lows as we've seen them and the general trend higher and then just lately with the market selloff. so planet fitness certainly one to watch also the big technology trade driving a lot of that nasdaq outperformance if you look at shares of apple,

microsoft, apple and amazon, the four members of that trillion dollar club, tesla's no longer in there, apple, microsoft, alphabet, amazon up just about a half percent mega cap technology is a big focus there as we see whether some dip buyers do and if you look at the cryptocurrency sphere, bitcoin is going to be a big focus, we're sitting at 31,332 or thereabouts, we've now lost roughly 55% of bitcoin's value since the highs. you may recall, 68,800, just shy of there was the record highs that we've seen. and by the way, there's going to be a keen focus on kind of like this june trade of last year basta poi

because it was about 29,000. as we look toward those low levels, that's what traders are going to watching. a couple thousand dollars below where we are is in focus we also have breaking news right now. peloton just coming out with its quarterly results. watch this stock literally live as it moves. it's now off about 14% it may go lower. we will see the fitness equipment maker losing more than expected with revenue falling short of forecasts peloton projecting lower than expected current quarter revenue. they did see slightly better number force the subscription business and subscription revenue. that's what the ceo, barry mccarthy, says he's hoping for some of that hit by more returns of that tread.

and it's, that tread plus that we've talked about, the one that i always talk about. but theiis is something people e going to be watching we should also note they are tapping banks for cash this is a theme that we're going to see with a lot of companies that are thinly capitalized, something that barry was talking about. there are so many companies that have sort of gone for growth over profits, and they are thinly capitalized, and this is what we're seeing. there was some expectation that we might have seen private equity or other money come in that has not appeared to have happened thus far. they seem to have been organized by j.p. morgan and goldman sachs. >> that probably explains a lot of the drop. but the new ceo has this incredibly tricky task they're talking about trying to become a software company instead of a hardware company, which, by the way, you're a

fitness company. they want to raise the price of subscriptions, but it may lamts the nu limit the number of new users they have coming in. they can rent them, the walking things you talked about. it's pretty tricky all of these dhaps hcompanies tv been calling themselves technology companies, not all of them are technology companies, they are companies that use technology, but that doesn't necessarily make them a technology company that's part of the re-rating for all of these stocks. peloton down about 20% >> anyone who owns this is like yes! pfizer's buying the rest of biohaven pharmaceuticals that it doesn't already own for $148.50 a share. up $60, 73% gainer today stock closed at 83, and it's

being acquired market cap was about $5.8 billion now we're calling it a transaction valued at 11.of bil1.$6 billion they have something called a gene-related receptor antagonist impulse control. and neurological disorders it's a glutamate platform. glutamate is present in 90% of synapses it's more than you need to know. but pfizer buying, what i don't understand, if they already

owned a lot -- >> why you get that bit of a r premium. >> unless there are new drugs that have come out >> proven leadership innovative late-stage product candidates targeting neuro and psychiatric diseases, including rare disorders the major averages are pushed into the red three straight days in a row where to put your money right now. the ceo and head of city global wealth investments i can only assume you're getting lots of calls from nervous clients. >> that's actually true. we've given advice over the last six months to create more conservative portfolios. where the revenue growth would be less susceptible to

volatility this shift is causing nervousness among investors. >> what do they stay when they call up, and what do you tell them in. >> it's interesting. a lot of our conversations have been about interest rates and inflation and especially around the idea that they have an enormous amount of cash. a lot of them do bonds are back not all bonds but municipals in the united states are yielding 3%, almost as much as treasuries are and tax free we're also advising them to be in certain parts of the market where dividends are going to continue to be paid and grow, areas like pharmaceuticals, which have never had revenue declines, even if we've had a recession. so we're giving them direction on where to put money to work. it's very tempting when you've had eight out of the last ten years. people haven't seen a negative

what's in the portfolio and how to make money as some of these stocks go on sale. >> you're right. it's hard to pick bottoms. but when you are talking about the nasdaq down about 25%, the dow off by more than 12% maybe and the s&p down by 15%. if you're a long-term investor you say okay, these prices are a rot more reasonable and rational than they were in the very distan distant past again, you don't pick bottoms, are you giving more conservative advice because people are so nervous and you want them to be able to sleep at night >> well, i think part of sleeping at night is looking at some of the data you just talked about. the last three years have been plus 35 in 2019, plus 34% in 2020, plus 21% last year and now about 25%. you think about it, some of the companies that you really want to own that have 20% plus-growth

rates. like fintech are at levels at or where we are that's because we have a five-year view, not a one day or one-month view what we're seeing is actually some people starting to buy a lot of where certain of these stocks are and so i think we're getting to the point where we're maybe 5% or 10% at most away from a place where we're going to actually add more to our equity over weight rather than take it away. >> okay. your largest weighting is in pharmaceuticals. joe jest meust mentioned this df the day with pfizer buying biohaven what do you think of a deal like that >> what the pharmaceuticals have is cash flow i can't explain the price specifically, but we're going to see companies like pfizer go out and acquire drugs that have long runways and they think have

excellent growth prospects in addition to developing their own. there are many of these, and a lot of the pharmaceutical companies earn 4% dividends. the ones overseas a little bit more if you can get one where it's going to grow and longevity is going to drive them forward, you want to put them in your portfolio and put them away. >> when you say you've been directing clients into them for some time to come. are there particular areas, these thenergy companies or cap-ex companies >> there are some of the energy companies, but what we've been focussed on most recently with the war in ukraine and with the change in global supply chains associated with commodities is adding stocks that are in global natural resources, where we think the companies that actually take raw products and make them finished products or distribute them out, these

companies i think globally are going to be able to sustain earnings for longer than people expect and their dividend rates can be higher. commodities, rare metals and the delivery and processing of all of them. >> where do you come down in terms of technology? because we've talked about the huge hit technology in particular has taken even, you know, the four horsemen we were talking about the big names. the companies that are actually producing profits. you understand why the market suddenly doesn't want any of these companies. you're talking about staid companies that have a long history, have a very understandable business, getting knocked down, 20%, 30%, maybe more do you like any of those stocks in what do you think >> in the payment space in particular, we do. and i'll explain why if you can buy stock let's say with a 25 pe or even a 28 pe and has a growth rate that you brief with some certainty is between

25% to 30% within the next five years that is not unreasonable, especially if the industry it's in is going to consolidate a lot of the smaller players in payments, are not going to survive versus some of the big players. that's certainly true in cloud and cloud services these are the companies we are looking for that have advantages and are beneficiaries of a consolidating market >> in terms of wealth management and the people you're dealing with is you have clients at that have been around for a long time, not just the last few years when it's been kind of fun to play in the markets what do you hear you've talked about markets that have gone straight up, basically. you have a lot of people who think it's easy to make a lot of money being in the markets when you see a huge shift like this, how much of your job

becomes becomes counseling >> a lot of my job is counseling but the real shock to the market is to the younger investor, who thought it was a gamefication. those are investors that are trading all the time or stocks that had no value could be straded on a momentum bases, those investors are very much in shock right now. you're see thank across the board at some of the fintech names that are all about stocks and investing. the clients that have built balanced portfolios as we've advised over the past five years have rotated into areas that are more defensive not to say that they didn't take losses but what we want to do is identify part of the market where they can put more money to work at the private bank they have more than 20% in cash and they had that level for more than five years entry points like this when

markets correct are rare how to get in and what to do is how to focus for the longer term >> thanks for your time today. good to he see you >> anytime andy warhol's portrait of marilyn monroe, setting a record as we go to break, check out the shares of norwegian cruise lines if you would a larger than expected quarterly loss saying that bookings veha now risen above pre-pandemic levels we'll be right back.

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and business is good. unbeatable internet from xfinity. made to do anything so you can do anything. welcome back to "squawk box. among the stories making headlines this morning, elon musk saying his vision for twitter now in alignment with new europe pan rules those rules include enhanced monitoring and becky and joe, we were talking about taxes that elon musk may have paid or not. he already paid when he bought those, he effectively had to pay taxes for the options last year. so when he sold those shares he already owned them in fact, he might have been able to take a capital loss so when i was referring to there may not be additional tax money

as a result of this last sale, that's why >> i went back and read the cnn article. >> part of the 11 billion from last year. >> 11 billion from last year, but someone else said you can only take capital losses of 3 billion. maybe you're right, not pay more taxes. sony reported quarterly profits that beat analysts they had strong demand for its playstation consoles and we're going to talk peloton, because that stock is dropping in a very big way this morning we're going to talk about it when ska when squawk returns after this

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andy warhol's 1964 silk-screen portrait of marilyn monroe has sold for $195 million at auction robert frank joins us now. pretty close, but the price is right under won? >> pretty close and a huge number warhol's blue marilyn going for $195 million just shy of the estimate of more than 200 million it is the most expensive

american artwork ever sold at auction and the second-most expensive piece ever auctioned just behind the $450 million davinci. but under the surface there were signs of weakness at least a little bit there were only three bids for this marilyn and bidding lasted only about four minutes, finally stalled out at around $170 million. so with $25 million in auction fees is where you get the price of $195 million. the winning bid came from larry gagosian on behalf of an unknown bidder there were 35 other works sold for a total of 317 million that was the lower end of the estimate about ha45% of the buyers were american the asian buyers just weren't out. my favorite pieces are coming up

for auction on thursday. ann bass selling three monets. one of parliament, the popular trees the these were in her living room. can you imagine walking in that room, all three of these pieces probably worth four to five times the apartment. and she's also selling a roth goe i know you and becky love. >> i was reading up on roth goe. he was depressed he never really became a major deal until after, years after. >> that's a sad story that seems to repeat itself again and again. i think i might have an idea, if i walked into a place and saw a monet. i'd say that might be a monet. but that's what i meant about the warhol if i see the warhol and it's real, i know it. it's a weird combination of pop

and art marilyn monroe, not a sensation, but iconic >> iconic. >> warhol's famously said i like money on the wall. and he liked an instantly wreck niezable image i know who that is, and i know who the artist was in 1964 when he painted this, he was on the ascendant. not only do i know who it is and who painted it ux burr i know what you paid for it >> it's completely different than let's say impressionists, what they were thinking about in paris when they were painting. there's nothing inherently beautiful about a campbell's soup can, is there how long do you stare at that? >> no. >> i love tomato soup, milk in

with it, crackers, saltines? but is it art? >> yes, it is. everything is. >> in the ieye of the beholder. >> i keep asking >> i'm looking for a meat painting for you, joe. >> $1500 is my upper limit >> be right back leer. >> you'll be looking for a long time >> probably. >> joe, i got to tell but another auction that happened last night at the robinhood foundation ken griffin won an auction, $8 million to go in jeff bezos' blue origin up into space and then rather than decide he wants to do it, he decided he was going to donate it to a new york city teacher >> yeah, i might do that >> in fact, two teachers are going to go up into space. >> they'll be donated. >> a different kind of auction

but it was pretty incredible >> were you watching >> i was there >> uh-huh. >> alexis o'hanrahan, we were saying what the news was they raise an enormous amount of money, but it was cool to see the whole thing in auction >> i'd really like to go, but i think i'm going -- he didn't reference that >> ken wasn't there in person. so they kept putting the spotlight on a guy lowho was bidding this thing everyone was like who is he? and when he won, they opened an envelope and said this is ken griffin. >> some good music last night, andrew >> i went home to sleep before john legend ever played. >> okay. >> i missed the action

>> he's a legend >> he is a legend. still to come, though, we've got a lot of legends to talk to. a small fund with big backers sounding up on esg investing, plus the nasdaq hitting its lowest level since november of 2020 we will talk to tim armstrong about the latest tech wreck and later the mattel will join us. so much more stay tuned, you're watching "squawk box" on cnbc just ask your cvs pharmacist. we search for savings for you. from coupons to lower costs options. plus, earn up to $50 extra bucks rewards each year just for filling at cvs pharmacy. okay season 6! aw... this'll take forev—or not. do i just focus on when things don't work, and not appreciate when they do? i love it when work actually works! i just booked this parking spot... this desk... and this conference room! i am filing status reports on an app that i made! i'm not even a coder!

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i'm dan o'dowd and i approved this message. vtesla's full self-.org to fidriving technology.sional. the washington post reported on "owners of teslas fighting for control..." "i'm trying..." watch this tesla "slam into a bike lane bollard..." "oh [bleeped f***]" this one "fails to stop for a pedestrian in a crosswalk." "experts see deep flaws."

"that was the worst thing i've ever seen in my life." to stop tesla's full self-driving software... vote dan o'dowd for u.s. senate. a small startup fund whose big founders include peter thiel. joining us, vivek rahm swami the idea is excellence over ideology you think all stakeholders can be satisfied by a company focussing on satisfying its consumers and employees rather than delving into esg. it's kind of the appnti-esg youe

launching. >> i find it difficult to define what esg means here's what we do stand for, a message to corporate america if you are an oil company, be an excellent oil company. if you're a coal company, be an excellent coal company if you're a solar company, be an excellent solar company. but we're not going to tell oil companies not to be oil companies. this deals with a fed , i think they are advocating for things most of their clients disagree with that's a fed usualry problem when that kind of capital is concentrated on one hand or a

few hands, we lack the true diversity of thought that our capital markets depend on. that's what we're hoping to fix at strife. >> vivek i did a little look at esg and performance. would you say that the, just if terms of the, not in looking at value judgment or ideology, it doesn't outperform i mean, can you feel good, theoretically, i guess you can feel good about it, but are there studies that are in where you can just close the door and say absolutely, esg does not work any better than anything else and maybe works worse do you snow. know? >> there's no evidence to support that fact. of course people on both sides of this debate are going to cherry pick data to support their own views.

but my personal perspective is that many of the underlying companies are actually performing more poorly because of what these large shareholders, and i use shareholders in quotes, because it's not really their money but the money of their clients, is what these large asset holders are telling their companies to do, exxon, it was caused to reduce oil production. i think exxon would be a more successful company today if it were actually drilling for more oil than it was before black rock told them to go in a different direction. there are geopolitical consequences that cause consumers to pay higher prices at the pump. and part of what we're exposing is it's the money of every day citizens that's being used to advance this ideology that most of them actually disapprove of and that's a disconnect we have to address one way to look at it, if you have the ceos of exxon, shell,

conoco and phillips in a room and they coordinated to say we're going to reduce gas production and gas prices spike as a result, there would be handcuffs and people locked up on anti-trust violations but when the owners of those firms mandate them to do the same thing, somehow that gets celebrated as esg instead. >> vivek, i think that's, i just want to put out the devil's, the other side of this, which is potentially, a, that there is a market place that all these funds can do what they want, and all these oil companies, i would argue to some degree it's a straw man, given the oil prices are today, and what they will be over the next five years, ten year, you would think every oil company in the world would be out there making new drilling plans and doing all sorts of things but they're not why not? i'm notconvinced it's because

black rock is telling them not to i think it's an economic argument they've made to themselves, whether you think it's a good economic argument is a different question but it's not solely because blackrock is screaming at them >> it's not solely because blackrock. you also have the largest asset managers in the world saying the same thing, blackrock, state street and vanguard. but when they all tell you the same thing, the shareholders ultimately have power to direct the way the firm operates. that's what we're seeing today but the real problem is the people who claim to be the shareholders, the black rocks, the state streets, they are not the actual shareholders, it is their client bases that would want chevron and shell to be behaving in different ways than they are today that's the disconnect that i think we need to address, and part of what we're missing here is that there is no diversity in the market place of ideas and capitalism there is one ideology,

stake stakeholder capitalism >> why do you think that that, why do you think that that's the case meaning, if all, why, why do you think that these four firms, which you said control the market effectively, all have the exact same view. isn't that a result to some degree of what they, what they must think the customer wants? you would think if the customer didn't want this, they would be doing something else >> yeah, there's two reasons why. one, we live in a very intermediate greated non-transparent system the doctors, nurses, business owners whose money is being invested by intermediaries, they don't know that their money ends up in the hands of asset managers that advocate on their behalf in ways that they disagree with. i think the nontransparency is a big part of it and you say the market should fix this, i agree with you we are bringing a market

there was a new tedemand of capitalism there were certain opportunists who said they were going to build on stakeholder capitalism. congrats to black rock i think the people of this country are hungry for something new. that's what we're delivering, it recenters on excellence for the consumer over every other agenda including divisive political agendas. i think that's not only going to be good for capital markets but unifying for the corporate culture and for the country. and my bet is i think a lot of customers, not every one not every client should come to us, but many clients, if not

most people in the country are going to get behind this message. >> how did you develop a relationship with peter thiel, bill ackman. is joel lonsdale part of this? those guys ideologically seem like they're on the same page as you. >> you mentioned some of our backers amongst others the we have a political diverse set of backers as well as employees at the company. but everyone is behind the common mission of reviving the unapologetic pursuit of excellence in corporate america. that's something we've missed with this new apologist model. people are hungry for this new movement in the country where there's this gap where the american people whose capital is being invested aren't being heard in corporate boardrooms across the country that's what we're going to fix in part by engaging directly with those companies, bringing a

diverse voice to the table most of my backers had read my book and recognized that we can move the needle a little bit by talking about it, but if we really want to move the needle we need to do something. the manhattan institute invited g gary fink and i to a debate. i accepted he declined. at the end of the day, if people aren't going to be talking about these issues, the best way to solve the problem is to give the choice to the market and the every day consumer and i predict many are going to be happy about the movement we are building >> we shall see. the journal has had some other, the editorial board has written about voting your shares for your own personal, political or ideological ideologi

ide ideological perspective is a little strange but it's done. thank you for coming on. >> thank you coming up, long-time tech executive, tim armstrong is going to join us to discuss the rising rates and then in the next hour, supply chain issues. the ceo of mattel is going to be our guest and talk toy troubles and the state of the consumer. you don't want to miss it. "squawk box" rolls on.

as covid lockdowns hit companies, we are on the ground with yewis eunice yoon >> reporter: all of next week, toyota is suspending 14 lines at eight plants in japan.

a rom tesla produced far fewer . chinese passenger cars on a whole, sales shrunk the most since march of 2020. tesla's data comes as the u.s. ev maker has said it has received no notice of a production result at its sl shanghai facility. the american chamber of commerce said at large, business confidence has been shaken out of their members, 15% fully shut their shanghai production 59% slowed or reduced production and 52% delayed or decreased their investment now a big problem, i'm told, not only bit american business community, but other international business people is that china lacks the predictability, you know, in the past, well, up until now, china's always been seen as a very reliable and predictable partner, but now that's really coming into question, becky?

>> jueunice, you get the feelin that this would have any concern with the push back from people in china or faffect the decisios they're making at this point >> reporter: so far there's no indication that the top leadership are very concerned about the disruptions that they're seeing for foreign business people or that the push back on the ground is having a meaningful impact. obviously, the leadership is watching it, and we've heard from various leaders, including the premier about the economic impact and potential loss of jobs, but in terms of wholesale change, there is no sign of that the numbers out of beijing and shanghai were low. in beijing it was close to 50 or 60 cases, and in shanghai, it's

declining. the numbers of cases are declining, about 3,000 most are asymptomatic, but at the same time there has been a ratcheting up of restrictions. they've also add, as we've discussed before, anal swabs for some controlled and quarantined areas. and in shanghai, they're going through what they've described as a quiet period. so this means no non-essential deliveries to buildings. people were allowed to go out for a little bit now they're all locked back in in shanghai, if you're in a building or a community is found to have one positive case, those, the entire building is being shipped off to government quarantine >> it's kind of hard to believe, two and a half years into this, hearing these extreme measures

when we come back, the world's largest tech companies losing over a trillion dollars in value in three trading sessions meantime, check out the futures at this hour positive territory off the highs up by 200 for the tou futures. s&p up by about 28 nasdaq up by about50 we'll have more after this to satisfy cravings from tokyo to toledo? we'll have more after this 1 50 we'll have more after this so you partner with ibm consulting we'll have more after this r data and workflows we'll have more after this and mr can serve up jalapeño, s&p up by about 28 nasdaq up by about 150 we'll have more after this u fut. s&p up by about 28 nasdaq up by about 150 we'll have more after this futus s&p up by about 28 nasdaq up by about 150 we'll have more after this d fut. s&p up by about 28 nasdaq up by about 150 we'll have more after this o fut. s&p up by about 28 nasdaq up by about 150 we'll have more after this w fut. s&p up by about 28 nasdaq up by about 150 we'll have more after this ate.

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. welcome back to squawk wild ride this morning if you are sitting maybe on a peloton right this minute, stock down 28%, close to 29% this morning after quarterly results came out the fitness equipment maker losing more than expected with revenue also falling short of st street forecast. peloton did see slightly better than expected numbers for digital subscriptions and subscription revenue and the new ceo, barery mccarth saying the company doing well on stream like the business, it's thinly capitalized got a loan from j.p. morgan and goldman sachs. these are not private equity putting new equity into the company. for more on this, we want to bring in tim armstrong, he's a

former ceo, chairman of aol, now verizon media. and so many other jobs you've had. we're all trying to understand whether peloton is a microcosm of so many companies that have been focussed on growth at all costs. tam, total addressable market rather than profits. >> andrew, great to see you. when i was on with you last week, we talked about it the valuations got way ahead of where people's businesses are. you see people starting to get really real about their businesses but i would say one thing. i think there's a chasm shift. peloton is a strong brand. the people who use it love it. i've known john foley for years. i think they've been an amazing business story the valuation story obviously

different. but investors are looking for a couple tings o things. i think they're looking for businesses to take actions against those areas what you saw from dara at uber. and people announce the fact that they are going to be focussed on the bottom line and growing in a healthy way i think the difference with peloton is them saying they're thinly capitalized is probably not what investors want to hear. but there's a lot of great businesses out there, a lot of great business on sale right now. you can buy amazon at 2018 prices amazon's only gotten stronger since 2018 so i think you have to separate the businesses into different buckets. and as an investor, even though you don't feel like buying now, you're getting to the zone where it's a great buy >> the other question, talking about buying i wonder whether a company like

peloton which now has a market cap, we're closing on $4.5 billion, $4.6 billion if you're a company that has great cash flow or an apple or somebody else like that, you can call up barry at this point and say you know what? i'm happy to take you out of your misery at this moment if that's what you think would happen how many of these companies get bought up over the next six to 12 months or do you think the boards still look at the price tag of where they were six months ago and say no, no, we can't even think about selling in this market >> if your thesis is the majority of the market is digitized, and you look at software eating the world, software eating the world is like the appetizer portion, it hasn't gotten to the entree yet. companies like the peloton or companies that have really gotten hurt in the valuation camp, if you believe in those businesses long term, having spoken to a lot of very

experienced investors, a lot of them are aggressively starting to look in the market you know for deals for companies, and i think what you're going to see, the boards that think it's better to park their company with somebody else are going to do that. and two, i think there's a lot of capital out there and a lot of smart investors so i'd expect to see a fair a deals getting done from 2020 to 2021, the venture market went up by 91%. i think what you're going to see now is the pe mayers players an players are going to step in there are a lot of great companies that are investable. whether that's for private equity or investors coming back into the market at some point. i think you're going to start seeing activity levels pick up where people have been frozen. >> how do you decipher whether peloton, and by the way, i was wrong. it's down to $3.5 billion in

terms of market cap on peloton how do you decide what the bottom is for a peloton for example or when you think you should strike it at this point >> i don't flknow, andrew it's hard to determine the down side of things let's take the security industry is the security industry going to be more important five years from now or less important i'm a big fan of what cash has done to palo alto networks, that stock is way down. that is an important segment as things get more digitized that market place will come back as an investor, you look at peloton or the securities space or anything else you have to have a core thesis, which is are consumers going to become, the economy's minority driven on software consumers are majority-driven on software so when you talk to people about peloton, they love their bikes they love the experience $3.5 billion the right

evaluation for it. one of the things we've been spending a lot of time on, how does the offline and online economy connect? and i have to be honest with you. i see a lot of opportunity going forward for companies like a peloton and a palo alto networks, the people who are building software that connects offline to online economy. i'm very bullish i know the market's not bullish, but we're still in the very early innings of tech and software, and you can't take the overblown valuations as the trend. the trend is it's going to be more democratized. i hate to say we're at early innings, but we are. >> always great to get your perspective on all of this, especially in these trying times where we try to make sense of it all. so thank you >> thank you, andrew. coming up, the ceo of mattel

and here's a quick look at the futures. we're coming right back.

good morning welcome to "squawk box" here on cnbc, live from the nasdaq market site in times square. i'm live with joe kernen and andrew ross sorkin. >> dow futures indicated up by about 115 points, s&p futures up by 32 and the nasdaq up by 162 but it's nothing compare to the pain we've seen over the last three sessions for america's biggest companies. combined, you've got apple, microsoft, amazon, they've lost more than a trillion dollars in just three trading days. things looking a little bit better this morning, doesn't make up for all the losses but if you take a look at what's happening in the twrz mreasury market, this is where things get

interesting. we've seen yields come down. normally, when yields come down, the stocks do better that has not been the case it dipped after we looking to set 3.1% yesterday we'll continue to take a look at this some question how the fed is going to do. it's really add up when you look at cryptocurrencies. that's where you see the pain. people have sold winners to pay for the losers bitcoin th bitcoin this morning is bouncing back sitting at 31, 670. let's take a look at other stories. there's been another ugly day for shares of peloton down close to 30% right now the fitness equipment maker reported a larger than expected

quarterly loss below estimates due to softening demand they finished the quarter the thinly capitalized they signed a letter to borrow in five-year term debt the company hopes to expand its subscription revenue but it may lead some users to cancel monthly memberships. there had been expectation that maybe there would be an equity infusion by somebody and that has not happened biohaven agreeing to be purchased by pfizer. a new publicly-traded company will hold some of biohaven's drugs in development and the most expensive piece of american art ever sold, andy warhol's 1964 portrait of marilyn monroe went for $179

million. the buyer has not been identified let's get back to the bro broader markets. cnbc's senior market commentator mike santoli joins us with what he's seeing now. are you seeing a few more articles that wow, we've got a long way to go down before we bottom that's a good sign, maybe. >> i agree with that there's a lot of, definitely reorientation of people's focus toward what the down side might be in fact, a lot of folks saying why wouldn't we go back to check the levels of the s&p 500 before the pandemic, and that's like 3500 or so so yes, i agree. that reflects the sentiment. now the little recovery we had this morning, it's only tentative, it's only partial but the positive piece of it is that it doesn't seem as if

there's s there's so much stress in the system that's causing a new wave of liquidation i guess you touched these level this is march of 2021, but we first got there around january, 3800, 3900, in that range. three 3% down days in the last week or so and yesterday did show signs of very indiscriminate selling. the energy stocks down no news getting taken apart. that's a flush lower that's seen as net positive if you're talking about going out several weeks or months. the two-year note is down from about 275 as a high, i'm sorry, let's first look at software versus energy. sorry, guys. my fault here's two-year note, down from 275, down to the two fives that's a positive. the market taking out some anticipated fed hikes.

here we are with the three-year look at software versus energy they have now join up together you know, it seems like software's been for sale forever and is in a desperate spot, but really giving back this massive, massive premium. it built up energy look where it's coming from over a three-year basis it seems as what we're see something convergence of these very disparate moves that we saw leading up to this year that are coming back together, joe. >> all right all right, mike. we're measuring sentiment. that's what all the technicians are talking about right now. it can turn quickly, too and then we also talk about mike, you remember when the nasdaq was being held up by a few great, huge market cap leaders, and it's like, well, now it's taken down by the same, i think the average nasdaq tstoc

is not down as much as those >> average decline of every nasdaq stock is close to 50%, it's like 47%. >> okay. i don't know how much more you need you never know, though it's been a long time with, you know, fire hose of monetary stimulus but anyway, thanks >> let's take a look at a different part of the market now. hedge funds seeing many of their most popular positions plummet leslie picker joins us this has been a problem. all of them having those same popular trades, all of those trades turning south at the same time >> that's right, becky hedge fund concentration has been a common theme for a while. and those most popular hedge funds tumbled yesterday. a basket of the 50 most frequently-held funds fell more than 5% yesterday alone, krubkr contributes to losses of more

than 26% to date that's relative to the s&p since the goldman sachs inception six years ago. big tech, microsoft, amazon, alphabet, meta and apple were the top five hedge fund vips big tech has taken a back seat to energy pg&e the recent market volatility has contributed to steep declines i equity-based firms if you recall the bet on netflix earlier this month, selling out at a $400 million loss after declining subscriber numbers last month however, thing loe logs don't th whole story.

according to recent numbers out of hfr, the average equity hedge fund is down 7.3%, while the s&p 500 including dividends is down nearly 13% the average fund was on a decline of 2%. >> leslie, i'm glad you ended with those numbers at the end. because at the beginning, i was getting more and more irritated. the idea of these hedge funds, that they are supposed to protect you when markets plunge. but if everybody's trading the same popular stocks and the popular stocks take a hit, it's really hard to do that i guess you can look at your hedge fund returns right now and try to figure out if you're getting your money's worth, it's times like these when the

markets shake out that you find out who's hedging properly and who's not. >> yeah, i think what's remarkable is the disparity in terms of returns obviou obviously, anyone who's exposed is going to be seeing declines. >> you want to be associated with somebody doing better fu look at what macro funds are doing, they are up double digit percentage points to date. that is definitely a bright spot within the ecosystem >> you may not feel that much better about not having to pay the 20% because you're not having any returns but if you can be saved from some of the steep declines it makes sense. it's going to be one of those times when people check it out and say is it worth it >> exactly and that's what's also

important, because there is this pastime, i would say it's a dying pastime. based on what we see with the g goldman sachs vip etf, you have to keep in mind the whole picture that hedge funds are also hopefully hedging those positions with a short book as well >> leslie picker, thank you. oh, boy, what about all the people who basically just try to follow kathy wood every day and look at her positions. anyway, another conversation when we come back, a pulse check on retail spending from the ceo in the thick of it the head of mattel is going to join us to tell his unique insights on the consumer and is there anything the white house can do to tame inflation or will we just have to ride it out ren e y enquk mo othwawh saw returns. bank, pnc has helped over 7 million kids develop their passion for learning.

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meantime, peloton looking to open about 25% down. we'll talk more about that in just a little bit, becky >> ann tdrew, thank you. at this point tomorrow, we'll be getting some nainflation number. let's take a look at a ceo whose business has been booming even with all the supply chain challenges r late last month, the toy company poested its strongest quarter ever and it's standing by its guidance thanks for being here today. great to see you >> hey, becky, great to be here. >> let's talk about these earnings you came in with 8 cents per

share. it's a lot to kind of digest to understand how you're doing this while you're fighting all the same things that every other company is dealing with right now. how you have managed to pull this off what happened? >> well, our momentum continued across the business with double digit growth in barbie, hot wheels and fisher-price. we started with strong demand, but the outlook is strong in continuing to grow market share. it was an exceptional start of the year we're very much in growth mode and continue to see momentum in our business >> a lot of companies have gotten caught up in the supply complain, even companies we thought were immune from them, companies like apple and tesla, which have really done a fantastic job to this point dealing with these issues. how are your companies running, and avoiding the shipping issues that every company is facing right now? >> our supply chain is definitely playing a key role in our success. we able to anticipate some of

these issues we have been able to keep all of our factories in full operation and mode and we're working closely with our partners to ensure product is available on shelves to meet consumer demand. we took several steps to consolidate operation, bring production closer to the u.s. and making targeted, strategic investment to increase capacity, improve productivity and drive efficiencies across the entire supply chain business for the company. >> your stock ran up by more than 11% recently on reports that you were in talks with private equity companies normally, i think of private equity having talks with companies that really need help in restructuring, to find a way to doing all the things you've already done why would private equity benefit in your case >> we don't comment on execution. we're focussed on executing our strategy and that strategy is working.

we are very much in growth mode and continue to focus on what we do best, which is running a great company that is growing, thriving and continuing to see momentum >> when you say you're a growth company, what do those big plans mean down the road i'm trying to think why you would potentially need any funding, what new and different enterprises would you be involved >> we're now executing our strategy to continue to grow the toy business there's plenty of opportunities for us to expand market share, ente enter new white space and drive the business we capture the full value of our intellectual properties, our franchises, our brands are performing so well across additional other verticals that are directly adjacent to the toy industry, such as content, consumer product and merchandise, digital and other opportunities all driven by big

franchises, big brands, and this is exactly where the quality of our portfolio. >>ing is going to come into play. >> you talk about barbies, these weren't for kids, right, when you get into some of these collector editions >> we are expanding the collector line we are seeing barbie perform across all segments, just an incredible success story it grew double digit on the first quarter on top of very high growth a year ago barbie was the number one adult property last quarter and the number one overall property last year the barbie movie is in principle photography. and we could not be more excited. it is shaping up to be an iconic

event with america ferreira and many other top talent. it's very exciting >> is this part of your plan to do more movie tie-ins to promote, the cross promotion you get out of it. you're taking a page out of disney, is this the plan to do more and more of this? >> we're builtding creative franchise. and we are very much on that path, given the quality, the scale, the diversity and the strength of our portfolio. we have an opportunity to expand our business beyond the toy aisle. th this is not to take away any of the momentum on the toy side of the company, but on top of that we see opportunities to commercialize our brands in exciting verticals that in some cases are larger than the toy industry, all driven by big

franchises, and that's the opportunity that was in front of us >> that makes a lot of sense but gets me back to the idea of why you might need more money to do that content creation is not cheap. >> we've been taking a capital light approach we're not funding the movies we collaborate with the major studios and of course with top talent out there, and this gives us the ability to operate at scale across multiple projs projects concurrently. our currency is the ip, the franchises that we own this is what we bring to the table along with creative execution and of course deep understanding of these brands and we collaborate with other players that specialize in these areas and together we bring these franchises to the big screen in the similar approach we take on television that is also thriving with 13 shows on air

this year, nine of which are new, and of course a lot of activity on the digital side in all cases working in partnerships and scaling our business model across all these variables. >> your cfo talked on the conference call about growing sales by 8% to 10% for the year. how do you plan to do that where's the strongest growth going to be coming from? >> well, we expect to grow across all of our brands, barbie, hot wheels, fisher-price as well as thomas. we expect to see growth in our leader categories, dolls, vehicles and preschool and we also expect to see growth in the second quarter with a very strong theatrical slate, where we have brands for "jurassic world," minions and

"lightyear." on top of the momentum in our own franchises >> you've got a pretty good feel for the pulse of the consumer at this point there are so many concerns that even though business is booming right now, we'll see ourselves wiped up in wind up in recession with the fed. what have you seen with the consumer and their willingness to spend >> the toy industry has shown resilience along covid, also in past years during challenging ch economic times, and when you think about it, it makes we believe, a lot of sense in that products are affordable. the consumer will always prioritize, parents will always prioritize spending money on the children, especially when it comes to quality products and trusted brands and the toy industry has proven

to be a strategic partner. it's a strategic category for retailers. it drive foot traffic. it's ex-peer edgesal and retailers are leaning in to this category play is a fundamental human behavior, and it's not going away parents will not prevent their children from playing during a pandemic the toy area is resilient. it has been growing for the past ten years and is expected to grow and we're very bullish and confident about the industry as a whole. and within that environment, we expect to grow our own market share, given the strength of our franchises and the quality of our product. >> the ceo of mattel, thanks for your time. >> thank you, becky. coming up, president biden expected to talk about inflation today, and the government's response to it but, are there really solutions

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still to come this morning is the government equipped to fight raging inflation, and if it is, should it we have key new data, and we'll debate that question as we go to break, take a look at shares of norwegian cruise line. they say their bookings are now exceeding pre-pandemic levels. that stock is up about 2.2%. you can always watch or listen to us live on the cnbc app you're watching live from the n nasdaq site on times square. but i didn't wait. i could've delayed telling my doctor i was short of breath just reading a book... but i didn't wait. they told their doctors. and found out they had... atrial fibrillation. a condition which makes it about five times more likely to have a stroke. if you have one or more of these symptoms irregular heartbeat, heart racing, chest pain,

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that toilet story is real. i'm going to get to it in just a minute but to some more serious topics. we've got four big things going on in energy number one. sorry, gasoline prices at a new record aaa saying it's $4.37 nationwide, topping the previous high of $4.33. gas production down, fewer refineries and the ones that are running are trying to put out more diesel and jet fuel to make sure w we and europe do not run out all as the saudis come out and warn the world on energy saying at a conference today, quote, i am a dinosaur, but i have never seen these things the world needs to wake up to an existing reality the world is running out of energy capacity at all levels. that is not all. the uae minister warning about investment, opec plus may not be

able to guarantee enough oil supply uk energy prices soar. this continues our reporting from last fall the head of scott erbish power saying bills could rise by more than a thousand dollars when rates reset. this could mean that many households' utility bills will have doubled in a year and here you go. according to straights times newspaper singapore, japan's energy minister is out asking people to conserve energy. some of their solutions include, watch one hour of tv less per day, turn off your toilet seat heaters and set your air conditioning at 28 degrees celsius. i had to do the conversion on that they're asking people to set their air conditioning at 82 degrees fahrenheit air conditioning at 82 no seat heaters. forget about it.

kind of a funny story, but serious. the world is running out of energy on many levels, guys. >> setting, what's the temperature on the toilet? >> so they want you to turn off the heat totally some of you know, japan, andrew. >> how warm do they make it? >> you can make it pretty hot. listen, i used to work for the japanese a long time ago can you warm those things up pretty good. now they want you to turn them off all together and set your air conditioning at 28 celsius i went to the conversion on that couldn't figure it out 82 degrees fahrenheit. i don't flowknow about you, thas not air conditioning to me they have to import about 80% of their power. >> earlier we had a guest. the argument he's making is that they're going to start a fund

that's not based on esg at all he believes esg is what's keeping the big majors, the oil companies and the like from drilling more. that they're so focussed on these issues that they're not focussed on real economic metrics that would make them more profitable. do you believe that's accurate >> yes yes, i do. i don't think it's "the" factor. i think it is "a" factor we had people on cnbc talking about the oil and gas industry being wound down it's going to be give all the cash back to share holders and in ten years shut the companies up and oil and gas go away it got a lot of traction, those kinds of big statements tend to play well on television, but esg, you're seeing with the big endowment funds, if there's no capital to invest, there's this big misconception that oil and gas companies are going to spend all their own money on going

after projects, these projects are multi-billion dollars in some cases they're going to spread the risk around you need many pools of investors. it's not like chevron is going to drop $5 billion of its own cash on a risky venture. they're going to collect the money from around the world. you take out 25% of the capital that would go into that project because they say hey, we're not going to do anything that's not esg, you reduce the pool of available funds. whatever people think about it, that's just the reality. by the way, esg funds can make a lot of money we're growing renewables quickly. the cost curve is coming down. we need more renewables. we need more solar, wind i interviewed the other bill gross about heliagen there's a rot of different ways to invest.

>> i usually don't try to talk anymore. we've had this conversation some times and it's hlike nothing eve seems to sway you. andrew, would you at least admit in europe, there's a reason why they have moved away from, they have moved away from fossil fuels deliberately and that has caused some of the. >> 100%. >> economic forces did not dictate that they drill less in europe and that it was all free market economics that got us in this >> no, no, no. >> we've been down that -- were you out the day when we were saying we were not going to develop fossil fuels in this country, when joe biden said i'm going to put an end to fossil fuels, when hillary clinton said i'm putting every coal miner out of business? have you seen what's happened the last five years? s >> the issue's slightly different. the state street folks, the

black rock folks and others. i would argue, there's an argument to be made about their, of c this. it's a fact toor whether when chevron wants to go out, they want to spread the risk they're not getting the capital from state street. they're getting it from pension funds who don't want to put the money in or private equity funds and others who collect up those funds. that's different, by the way, than the pressure that black 3 rock is applying. >> hold on i'm in the screen here >> the wall. >> that's all you hear non-stop for five years, everybody's singing the collective tune. >> but we're starting, guys, let me just jump in for a second

by the way, both of you are making great points, and i'll say it this wide there are now three camps, and i think andrew to your point, this peter thiel-backed fund, those guys, they're twrierying to mak different point, they're saying we're going anti-esg just to be anti-esg >> they are saying they don't think these big etf managers should be making, the people in their etfs don't share the view point of fink. who made you emperor it's a diversity of opinion. >> that also goes in state street and vanguard and blackrock. >> but that article, that issue also goes to these structural

construction of etfs and voting their shares anyway. and oil and gas is at the forefront of that. let me find a middle ground. there's three ways things are going, institutions, universities saying we're not going to invest in any fossil fuels, right, princeton is being pressured by students to divest all interest because the planet's going to burn to death in three years now you have some finding the middle ground, like calpers and c calsteres. if we completely abandon it we won't have a say, and we'd rather use our heft and might to flex and help change things from the inside out >> we're going to start our conversation, we're going to talk inflation with our next guest. we'll start with this topic. let's bring in michael strain.

and donna edwards. i also want to talk inflation, because i don't know, both of you agree there's very little, it's not what the government can do, it's maybe what the government doesn't do that might help michael, we'll start with what we were just talking about esg, just a lot of pressure from, brought to bear from all over the place on fossil fuel companies. should etf managers be voting shares that are in line with their own ideology >> yeah, it's tough, joe, because on the one hand, they're responsible forecasti casting te votes, on the other hand you're right. many of them probably don't share the view of the fund managers very an old-i have an old-fashi

view that the goal is to hayes ro raise profits. and if they have social issues they should be voting with their dollars and expressing that. if people are putting money into a pension fund and the pension fund is pulling out of fossil fuels, they need to make their voices heard and to a large extent they're not doing that right now. there's something to be said for kind of active corporate citizenship among people who are making some of these investments. but, you know, basically, i think you and i are on the same page >> congresswoman, we can even tie it in to inflation i don't know where, i don't flow what we're going to be paying for gas in july. it could have been a little friendlier to fossil fuel

development in europe and in this country, and it's coming home to roost. >> well, except that as i listened to this conversation, my view is that we're about 30 years behind investing in the kinds of renewable energies that would get us off of fossil fuels and we have sitting over in the senate a $550 billion investment in renewables and in dealing with climate change. and so this is not about just social and moral values, it's about an existential threat to all of us, whether quwe're consuming fossil fuels or not, it's a threat to all of us on the planet so i think this conversation tied to inflation really is, what are the tools that the president has in the short term, and maybe that's sorm me sort of

release of strategic oil reserves, those are short-term solutions, but the long-term problem here is that we have a dwindling resource, and we have not had the ability to invest in things that are not going to put all the rest of us as consumers in jeopardy, because we're so heavily dependent on fossil fuels. >> europe's probably way ahead of us, and, you know, you can't, you can't just say we're going to have wind and solar, and it's going to be competitive and fund, and it's going to provide for all of our heating and power. it's not there donna. it's just not there. and you're paying the price for it, and we're paying the price and we can wish it was there and throw more money at it and everything else, about you it's simply not right now and what we're seeing with inflation has a rolot to do with that what can president biden say today or do today to ptry to

bring down inflation, which not allowing more spending which the fed has to more or less finance. >> the best thing biden can do is build a time machine and go back to march of 2021 and not pass the american rescue plan. it contributed about three percentage points to the 7% inflation that we had in 2021. it's continuing to fuel inflation in 2022. of course the president can't invent a time machine any more than he can convert the united states to using purely renewable sources of energy. do no harm is really the best thing the president can do if build back better had passed it would have increased the deficit by $400 billion. now is not the time for big new social programs that will boost

demand and boost prices. another thing the president should really consider doing is abandoning his commitment to buy america provisions which will also boost prices, getting rid of some of the trump era tariffs which are boosting prices, but the options to the president are do no harm and these sort of parra production -- >> let's give donna "the last word." you want to do the student loan, you're ready to continue along their path you don't think any of what fiscally we've done has added to our current situation in terms of inflation >> look, we were min a pandemic. we still suffering the results of having massive interrungs to our supply chain and of course ukraine and russia and oil have impacted

inflationary pressures but a student loan forgiveness, even at a level of $10,000 that the president has proposed is going to have a very marginal impact on inflation, so we, i mean, the president has the tools. he's going to outline those today, reducing the deficit, making sure that we're lowering prescription drug prices for consumers, releasing the strategic oil reserves, these are all things that can be done in the short term to reduce the inflationary pressure. >> great, congresswoman, thanks. coming up, jim cramer's first take on the trading day, straight ahead do i just focus on when things don't work, and not appreciate when they do? i love it when work actually works! i just booked this parking spot... this desk... and this conference room! i am filing status reports on an app that i made! i'm not even a coder! and it works!...

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let's get down to the new york stock exchange, check in with jim cramer this morning okay, jim, here we go. green arrows this morning. should we feel good about their has been short, he came in covered his short on the nasdaq. again, he is a trader. he feels that the sell-off could be concluding. what he really is focused on is that if we get down to s&p 3,600 to 3,500, he's not going to be a trader, he's going to be an investor he thinks it's at the bottom and it really is a great time to be able to take a shot. i like what he said -- >> wait a second, jim, back this up in case people aren't paying enough attention, this is important. you just talked to him >> yeah, just talked to him this morning a couple times he's been short the bonds, covered the bonds short. really feels kind of interesting trade here i just think that -- i'm not going to go against him.

i think he's too smart -- major decision -- to covering the nasdaq was just a really great short. i think he's -- >> he said 3,600 yesterday the s&p goes to 3,600. >> right and nasdaq he thinks holds at 12,000 ten year, 2.9 to 3.2 but, again, he's a trader. it's worth noting that he's a great trader and he's probably 23, 24% long, maybe no more than that 25 when you finish today but i think it matters and i think it says that you have a good bounce here. there's a lot of stocks that are being forced down looking over, but they would absolutely -- there would be a scramble just because it's been so good and vocal. this is a covered short, i want to emphasize again but he thinks 12,000 holds the

nasdaq and that's a pretty meaningful call. he's not a trader, he's a buyer of the s&p at 3,600. >> i go back to the days of the temper tantrum, calling it right the entire time we've been watching the fed and this is the fed totally in play. does that come into any of t this -- >> he covers bond shorts so obviously he thinks they overshot he had been pretty vocal against -- pretty vocal against bonds. didn't like, of course, what -- when fed chief powell said it was off the table. i thought it was ill-advised there was no reason to do it this is a major change for him i speak to dave quite a lot and i know he's been very, very negative this is a big trading cover. if it goes down more, he wants to go long. >> it's -- where to close, the

nasdaq -- it goes back above 12 and stays there. >> that's why he wants to cover. it's up at 12 -- you know, yeah, he thinks it goes higher i have to tell you, i think it's a very meaningful call let me just see. i don't know i mean, i think this is just him talking to me, just -- i don't want to violate it i know he likes it here, i like it here. >> this is big news, jim, and people are going to be paying attention because tepper has called it right a lot of times. >> yeah. but remember he's a trader and he can change his mind right now. i just pointed out -- all right? >> all right jim, thank you thank you for bringing us the news we appreciate it we'll see you in a few minutes.

>> a little more than half-hour till the opening bell -- oh, we're going -- thanks for telling me andrew >> we're going to talk peloton those shares are plunging this morning. the company reported its earnings worse than anticipated and let's show you where the stock sits right about now we were down 25% before. you're looking at that stock now that -- now we're showing us a larger chart there but why don't we show everybody exactly the full chart if we could of where we are right this second as people are focused on peloton this morning after those earnings the banks stepping in. jp morgan, goldman sachs providing new loans. not equity, though some people thinking about how well capitalized this company is going to be. looking at a market cap, by the way, of just about $4 billion and you can just think about where that was before.

a lot of pain, a lot of pain going on this morning. high-flying covid era stocks, others in that category like zoom and teledoc continue to trend downward is this the final act for the pandemic names portfolio manager at dcla and a cnbc contributor what do you think of these names? i'm curious of what you think of what we heard from jim about what mr. tepper is thinking about. >> a couple of things there, andrew i think these pull-forward demand stocks -- especially when you look at what's happening now -- they're going back to the credit markets, going back to borrow money when their demand is softening that's troublesome for equity holders. i think peloton has been the poster child for that where we're going from the pandemic to endemic. people are starting to go out and work out i would be careful of owning, you know, stocks like peloton because i think the future cash

flow is what you're looking at that is softening at this point. >> you look at a company -- at $3.5 billion, and i mean, that was ten times -- more than ten times at one point do you look at that and say, okay, maybe this is cheap. maybe this is going to work out? >> i don't see it. as a creditor, you might get better opportunity there but if you've got -- you know, this is kind of the classic value trap model where crash flow is declining, they're going to the credit market to borrow money and subscriptions, they were up 5% for this quarter, but they could turn negatively and all of a sudden the equity value is not much here you have a lot of debt outstanding. i would be careful as we kind of reopen stock like a peloton. >> we heard that mr. cramer talked to mr. tepper mr. tepper has covered his nasdaq short are you of the view that we've hit the bottom here?

>> we're definitely bottoming. we're down 7% in three days, down 17% since the top you've got a lot of excess coming out of the system, rates have moved up, you know, investors are looking at other areas as well, not just reducing leverage, but also looking at some opportunities in the bond world. so, you know, hard to call a bottom but when you're close to 4,000 and i think you mentioned the number 3,600, there are a lot of stocks that are down 30, 40, 50% and the opportunities are there. it's okay, we're dipping back in we're putting new cash to work for clients. i think there's some great opportunities out there. maybe we go down lower again the cpi number is going to be important. where are we with peak inflation, peak fled those are important things and i think investors have to understand, the fed is not going to help us out here. and i think that's going to be key. we've got a lot of other issues there. but there are opportunities now that are much better than we were two weeks ago. >> we have so many viewers in the mornings these days who own

indexes, mutual funds, like cathie wood on one end if you were to put new money to work right now, if you were going to do that, and you weren't going to just buy individual stocks, because there's a lot of people who are watching who often don't do that, how would you do it? >> so i would look at equal-weighted indices, andrew right now, you're still kind of looking at some large cap indexes that are overweight. i would like at health care. i think health care is a very good and safe place to be with growth rates in there. i would look at industrials. and then i would also look at the banking side i think those are kind of the growth opportunities there tech is good but you got to be very selective there because it's still being overrun by the microsofts and apples of the world. so i think those will be the three areas that i would look at if you've got, a, either active managers or equal weight indexes

because some of those stocks have just been killed. >> talking about getting killed, you want to weigh in at crypto we're at 31,000 this morning it's a little bit than where we were yesterday where we were dipping in the 30,000 range there. >> yeah, you know, crypto is an interesting beast right now. it could be a hedge against inflation and the dollar nothing has worked it has a -- people look at it as diversification. it hasn't been proved. so much of this is on leverage people are borrowing money to do a lot of this. when things come down like they have so fast so quickly, you're going to get speculative access coming out but i think crypto will survive, but it's going to be as to what piece of it. we're early in that stage and it comes down, you know, just like everything else is coming down in the market at this point. >> we appreciate it. it's going to be a heck of a watch today. about a half-hour before the

markets open thank you so very, very much as we said, green arrows for the first time in the morning that we've had in quite some time we'll see how things open, guys. but make sure you join us tomorrow, "squawk on the street" begins right now ♪ good morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david farber. we're going to hear from yellen and potus today on inflation and financial stability. ten-year yield below 3%. we begin with the bounceback stocks are poised to open higher after three days of heavy selling. >> plus, we have a biotech deal this morning pfizer is buying bio haven the price tag, 11.6 billion. and peloton shares are plummeting yet again