you hit 27 >> next level. >> 18. who knows? disney shares falling. company closed yesterday at two-year low it is down significantly again this morning report ed streaming growth, but warned of the tougher road ahead. it was expensive some of which was cricket in india. very popular. beyond meat losing a quarter of its value after the expensive launch of plant based jerky. it's thursday, may 12th, 2022 "squawk box" begins right now. welcome to "squoawk box" her on cnbc. i'm rebecca quick and andrew

ross sorkin is on assignment along with joe kernen. we are talking about declines with the dow indicated another 200 points lower s&p indicated down 28. nasdaq indicated off 128 points. this comes after the losses yesterday. nasdaq was off by more than 3.1% the s&p was down 1.6%. dow off as well. we are really starting to talk about adding up of the huge lows this is year to date if you are talking about from the highs, the losses are steeper. the dow down 13.8% from the all-time high. s&p down 18.3% nasdaq down at yesterday's close 29.9% from the all-time high if you add up the losses today, you are talking about the nasdaq down 30% the question is when the

bleeding stops we have to wait and see. it is not happening this morning. if you are looking at what is happening in the treasury market yields 10-year yielding at 2.18%. it has come down significantly we had seen it at 3.1% it bounced yesterday after the hotter than expected inflation numbers. now you see 2.81%. let's talk crypto. it is tis tumbling. we talk about is it the dog or the tail it may turn around in terms of what is feeding what bitcoin below $27,000 this morning. for the first time since december of 2020 check out the chart of bitcoin losses this wooeek. if you look at the screen, the selloff coming as the value of the stablecoin terra plunged it mirrored the value of the

dollar it fell below 30 cents yesterday. right now, we will show you where that is trading as well. bitcoin now -- we will see terra down 41% new this morning, i don't know if you have seen this yet, tether has fallen below dollar parity as well there is news they are changing or flipping the quote chain they're on, joe. i don't know if you are an expert on this. >> no, no, no. >> i know you read the papers over the years on bitcoin. >> i don't want anything stable. >> they are doing what is called a chain swap they are converting what seems to be a lot of money quickly that is going to get that back

to parity or not we will see. i think all of this coming as a lot of anxiety with crypto as we have been discussing how much of the crypto selling was a result of selling in the stock market and people leveraged up and selling crypto now it might be the opposite i think there are a lot of people who were holding crypto that may now start selling stock. >> people that aren't committed are gone, i think. here is the weird thing about technical analysis you have to hand it to katie stockton we talked to her and she said $40,000. then i said 39, does that count as a breach or is that still not reaching it? i said you are not nodding it did count as a breach i was saying has it stabilize.

she said 27 is next. that's classic what does it mean? it means that's the next target. if we talk to her today or tomorrow, we need to find out the next support level the 27 could be a temporary holding pattern or there's the reason technicians can tell you no this is a very good support level where you could expect at least some type of short-term. >> joe, when do we say with bitcoin is there a moment where someone could say the emperor is wearing no clothes i know you studied this. if it is not a currency and not a store value, clearly -- >> that is always possible at this point, i think it may still be the dog, not the tail i think crypto would stabilize before nasdaq and bounce right now, it is just a

speculative asset. that is how it is trading. i don't think you would ever say do you think we get to the point where a stock that's -- nasdaq stock is at zero it's down 50%. is the emperor naked i don't think we're there with crypto i don't think we're going there. >> all of the stock to flow and all of different analyses and w get to 500 >> the stock to flow is still indicated. if you talked to novogratz, he would say the next two or three years. the much wch would say the same thing. andrew, we have seen this before the 55% drop brings it to 27,000 not 4,000.

>> that's true. >> as recently as two and a half years ago was 4,000. if you get a drop to bring it back -- i tell you what, i have seen a cartoon line of people at bitcoin at 65,000. they are all there give me more on the left, a line at 27,000. it's empty a person waiting to sell no one is there. they are all at 65 this is the way psychology works. i bet you 27,000 if you had the nerve, it's a pretty good entry level. if you liked it at 50 or 60. if i bought at 8 and 5 and 6 27 that is a major commitment if i'm going to hold what i have at 27, you would think -- if you don't sell what you have at 27, you might as well buy it you are making a decision to

hold what you have it is all money. we'll see. i don't think -- if it does, andrew, el salvador will be bankrupt micro strategy what will happen to those shareholders >> the galaxy digital? the winklevi steph curry? he is the star of the crypto ads. >> stablecoin questions are the big ones today the reason tether is a big deal after ust fall below 35 cents yesterday, the stablecoin is a big deal tether is a big deal it is the biggest of the stablecoins. $81.3 billion in market cap.

usd at $48.9 billion that is why we watch this. there is a lot of money involved the idea of it being stablecoin, you put air quotes around the idea of stablecoin the question is leaking through the entire crypto world. that is what you are seeing shake out. >> we will talk more i'm wondering what is the total population of so-called stackers, andrew i don't know what that is. if it's 20% of the bitcoin holders. there are weak hands and there are strong hands there are stackers i don't know what percentage it is you would think they would be adding to their positions at 27. >> if they have cash and not leveraged. >> leverage is the issue, too. right. >> here is an example of when you ask the emperor a question disney was almost $200 a share

it's 99 this morning it's the same company. the value is differently by investors ironic we will talk about it. >> that is interesting would you rather own bitcoin today or would you rather own di disney >> you can own both. >> if you can only own one. >> let's talk about how odd it is that streaming, which was never their best business or profitable business. streaming took it up to 200 during the pandemic wihen the parks were closed. the parks are open and now 99. earnings and revenue both miss >> look at netflix >> they added, but we will talk about p it covid closures are taking a toll on the parks in asia it is not free sailing disney reported stronger than

expected growth across all media platforms. licensing revenue would decline and production, content production would rise. sports is expensive. the dtc you saw, direct to consumer operating losses, a year ago $290 million this year? $ $887 million it is expensive at this point. a lot of it is one big driver of subscription was indian premier cricket matches. 8 million subscribers watching just for that. all included in disney plus. it is getting more and more ex-se expens expensive. do you believe chapek when he says 2023 and 2024 goals are easily achievable? i don't know if i believe that

we have inflation and churn goes up if people find this out and i don't want disney plus >> there are only a few left six or two or one? greenfield says he thinks disney should sell hulu and reinvest in roblox or netflix. keep espn. slim it down maybe not spend as much there. this is when you see revaluations on the street looking at things differently. you will see ceos rethinking what makes sense in the environment environments. >> to see rich greenfield who is the biggest proponent of streaming and very right about that and then turn around and say the model doesn't work get rid of it. he is not saying the model doesn't work >> maybe netflix given the valuation. you sell out of one andput int another one.

netflix is not getting rid of streaming. it is looking for another way to beef up. the entire board rooms everywhere will rethink strategy based on the market revaluation. you heard that already from somebody like dara he said we have to change our plan there is a new metric. barry diller's company saying the valuations have changed. this is not going to be a short-term thing of months, but years. iac will get good values as you buy the companies like they used to do. >> we learn again and again how things are valued. we look for inherent value it is illusive disney was so loved right in the middle of the pandemic because of streaming the parks were closed. why run up to $200 a share because of the prospects for streaming five years from now adding to the bottom line? now the parks are reopened and the streaming is disappointing

it's worth half of what it was worth? that shows you people fall in love >> everybody was chasing the netflix multiple you remember dan lobe came out and pushed disney though change the strategy you need to spend more on content and push toointo the streaming world. they chased the illusive mul multiple a great business is one that produces cash. free cash flow what you will see over the next 6 to 12 months acquisitions with companies with cash flow and a balance sheet to go out and buy the businesses that don't >> if you just value a stock based on one-time cash flow is one thing. disney, apparently, the stock

and cash flow may be 2 or 3 or maybe multiples or fractions the psychology of the work here is one thing, andrew. you can find bitcoin bulls and hodlers and stackers they would take hand over fist over disney. i want my 20 there are only 21million de-basing the currency it is the internet of money. it is like amazon. you can find a lot i know the choice you were making and saying. disney has theme parks and streaming. >> i'll take that. >> you are saying it is insane to say bitcoin in the same sentence as disney you can find people that would say you're right disney can't hold a candle to bitcoin. i don't know who is the right in the end. >> netflix down from 7600 to 16.

you can look and see if these are bargains. >> netflix is down a lot more than bitcoin >> what is a bargain it is just beginning of the end. we don't like at things the same way. i don't know the answer. that's what smart p people are trying to figure out right now >> as i said, the sun did come up and we're all alive. >> we got that gone. >> the sun is up beautiful view this morning. >> in d.c. it is thursday the best day of the week it's not quite friday. friday's too close to monday coming up, we dig into the plunge in crypto prices and crypto related stocks. andrew, the coinbase stuff is deep we can't guarantee if we go bankrupt, get in line that's unbelievable. as we head to break, check out the shares of ark innovation

what is the value of these it is down right now after falling 10% yesterday. you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by ibm. ibm. let's create technologists in india, and customers all on different systems. you need to pull it together. so you call in ibm and red hat to create an open hybrid cloud platform. now data is available anywhere, securely. and your digital transformation is helping find new ways to unlock energy around the world. at fidelity, your dedicated advisor will help you create a comprehensive wealth plan for your full financial picture. with the right balance of risk and reward. so you can enjoy more of...this. this is the planning effect.

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coinbase shares and crypto

seeing steep losses with the biggest crypto exchange down 70%. we have rich at piper sandler rich, i thought coinbase was a safer way to play crypto coinbase is down more than the asset class that it merchandises it. >> good morning, joe thank you for having me. i guess the answer to your question is it is viewed as a risk asset and i heard the discussion that you three had just this morning. they have had some other issues. you brought one up about the disclosure of bankruptcy risk. we don't think this company has

$6 billion in cash this is a path to the market cap right now. they have chosen to spend and invest and stay solely focused on crypto. joe, i'll date myself. i was around for the internet boom that is the thing we like and we saw in companies that made it through the internet boom. whether it be amazon or more of the trading space of e-brokers everybody said merrill lynch and wells fargo had the technology and do what they do easily those companies woke up every day having to make money or survive based on just internet trading. coinbase, that is what we see with coinbase in the crypto market. >> rich, if, for lack of a

better term, if the emperor does have no clothes and these go to zero, coinbase would go to zero, i bet. what would the ramifications be of the crypto world or the stadiums named after it? the countries like el salvador the companies that have a large part of their cash or assets in general in crypto? what type of fallout would that bring? it wouldn't have to go to zero what if bitcoin went back to 10,000 how much collateral damage >> no doubt. significant damage, joe w, with the companies you name it would be significant damage there are a lot of people that believe in blockchain technology and cryptocurrency and where

that can bring us. the defi applications. it would be widespread we wrote a report last year about big technology driving big change i don't think we are alone in the people like michael novagratz or microstrategy they believe there's more to cryptocurrency and more to blockchain that's ultimately going to change a good bit of the way we do finance these days. >> you bring up some important points there are utility uses for blockchain across the board. i wonder if defi and blockchain -- it wouldn't have to be manifested in bitcoin. it could be another coin

theoretically. i don't know there could be other iterations and leave the existing assets in the dust that is possible if your view, it is unlikely we assign a zero value to the whole space? >> absolutely. two points i would like to make. andrew brought up do you choose disney or do you choose crypto company? certainly the cash flows of disney are probably safer. it is about risk/reward. there are people and investors that choose and want to make a bigger bet on technology to drive bigger change. i want to address this issue that you brought up about coinbase and bankruptcy issue. you know, can't protect their investors and assets first, they have $6 billion in

cash now roughly half their market cap this issue was driven by more regulation and s.e.c. disclosure that says publicly traded companies that handle cryptocurrency for third parties have to disclose this because the potential for crypto assets to be, we think, a small risk in a bankruptcy because it hasn't been tested yet. the one thing i would say and to me, this is an important point, half of coinbase assets are institutions these institutions, if you haven't been around through mf global and bear sterns and lehman brothers, they think of the black swan events and bankruptcy we don't think that will happen,

but they feel safe and they have better protections in the terms of service where the issue came up is the terms of service for retail are slightly different, but coin b base is working diligently this is a matter of weeks to be equal to the institutions to think and plan for these events. >> rich, i know these are one-time events, but we all lived through 2008 we lived through 2000 those were quote one-time events and those were supposedly smart people who told you money at lehman brothers was good to go we know what happened. when a black swan event happens, all sorts of things and people

don't think of things that would happen i appreciate what you are saying at the same time, if, in fact, coinbase gets into trouble, actual real trouble, it could create all sorts of things we will not understand. >> andrew, i agree with you 100% if you are an institution or hedge fund, you plan you have been through or witnessed what happened in those periods with bear sterns and lehman brothers. institutions do plan and you should plan for the black want events they are comfortable having their money and they have terms of service that protect them it isn't exactly the same right now for the retail guy frankly, it should be. you should 100% -- things can

happen that 1 in 100 or 1 in 1,000 or whatever you put on lehman brothers or bear sterns >> rich, always good to see you. thank you for your insights this morning as we try to make sense of this appreciate it when we come back, more on "squawk box. escaping the tech wreck. robert frank has a look at the insiders who cashed out before big is to be drops as we head to break, check out shares of apple. that stock plunging more than 5% during yesterday's session that loss, apple no longer the world's most valuable company. that honor goes to saudi aramco. it is now worth $2.37 trillion apple has fallen 20% scein the peak on january 4th. we're back after this. >> announcer: this cnbc program is sponsored by baird.

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welcome back to "squawk box. several corporate insiders managing to avoid the tech wreck with the payout. robert frank has more. >> reporter: good morning. $5 trillion lost in the stock market this year some insiders cashed out before the big drop peloton shares down 90% from the peak before the fall, ceo jon foley cashed out $119 million in stock. insiders selling over 5$500 million in total

and the father of the ceo of carvana sold $3.5 billion in shares on the way up the share sale totaling half of the company market cap palantir selling over $1 billion in shares. peter thiel cashing out over $600 million before that big decline. you guys talking about coinbase. shares trading at $52. brian armstrong sold at $389 a share. cashing out $300 million of shares and roblox down 82% from the high insiders cashed out $800 million before the fallout ceo david baszucki cashing out $260 million of shares

biggest sales in november. that is when the stock reached its highs. in 2021, it was a record year for insiders totaling $170 billion. andrew >> how much of the sales were, as you said, in the context of roblox at the highs? how much was sold into so many of the offerings >> it's a big mix. i think the big question here's is as you and i have talked about, all of these were 10b51 plans. this is something the chairman gary gensler is adding a new rule this was supposed to minimize insider trading. it provided a cover for people you can set up a plan in the morning and start trading your shares or selling your shares that afternoon then you can also terminate the plan early

all of these were under the cover of 10b51 that is the issue that regulators or company boards will look at >> you make the plan in the morning and selling by afternoon or selling within the week of the plan being put in place. is that a majority or were these actually things planned six months in advance? >> again, it is a broad spectrum many of these plans started selling shortly after the plan was started. what gensler wants is a three or four month cooling off period between when you start the plan and when you can actually sell >> makes sense robert frank, thank you. >> thanks. when we come back, we will talk to former s.e.c. chair jay clayton on elon musk and more. we are celebrating asia

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good morning welccome backto "squawk box. checks futures they are down after another disappointing session yesterday. started out promising with the cpi data market traded higher after the

cpi data, but when it was all said and done, it closed sharply lower. sentiment is negative than we have seen. a lot of stocks tat $200 disney looked great netflix at 700 buy it now 165. that is not a buy. it is just weird >> are we -- >> hold on hold on, andrew. just hold on why do we need to unwind the euphoria from the pandemic the pandemic closed us down and for some reason it got so overheated it caused a fed to stay at zero? we shouldn't have to unwind the speculation from the pandemic. it should be the opposite. we should be rebounding from what asset values during the pandemic

>> you have to unwind from the speculation of the easy money and liquidation. >> the sentiment now is negative maybe it's bounceable from here. >> andrew? what do you think? >> i'm not in that camp. i'm in the camp there may be more pain to go. the reason i think is not just the federal reserve, but all of the things we did fiscally in terms of handing out money that is evaporating i think for two years during the pandemic, we asked the questions. are people going to look through this look through the pandemic and pretend the pandemic didn't exist? >> and how >> and how >> not only look through it, but people sitting home on their coa couches, netflix went to 700. >> are you going to continue to

grow to the sky? the answer is no it is not some of these are not great businesses or things we still use all the time the valuations were based on the idea you keep growing. that is revalued i have a couple of guests right now to dig into the market moves. lisa ericson is the head of the market group and gunjan is the cnbc contributor gunjan, you have a great story of how the dip buyers are being tested like we have not seen in years. are they to the point of c capitulation or beaten down and trying it this old technique >> that is right, becky. the group retail investors has been tested like never before. the wildly trade buying the stock market dip it is the worst time for that since the 1970s. it is different from buying the

dip and stocks shoot up. s&p 500 is falling the day after it notches the big decline what i found with my conversations with investors is they are stepping in they are reluctant to let go of apple and microsoft and nvidia maybe they are pairring back on the tech trades, but they are still buying in. we will see how long it will last. >> lisa, we have not seen a re-rating like this in of the market in decades going back to 2000 and 2001. suddenly things we were willing to put value in is not the case. how do you figure this out when you have this taking ing place? >> to your point, becky, we are on the back of that taking a balance viewpoint with the equity market.

the background behind that stance is on the one side as we talked about and were you just mentioning, the fundamentalsof the economy are still solid. you look across the macro cater indicators and you look at sales and it is in the growth territory. we have sentiment and investors having a hard time this year and the fed tightening the headwinds and risk are standing on the the u.s. equity position is what makes sense of this time. >> standing pat, but not buying because of the discounts is there more room to drop is your analynalysis? >> we see the scales evenly tilted for eeither side we advocate standing where you are and look for further opportunity. >> gunjan, the people you talked

to, do you get different reactions when you talk to people in the markets for five or ten years or people in the market for decades >> this selloff is challenging for all investors. it is so different from the crash that we had during the march of 2020 covid downturn one of the most prolonged selloffs since the financial crisis i think everyone is taken aback by how terrible it is out there to be frank and the carnage in tech to put it in context, some of these darling stocks of the past decades, seven of the biggest in the s&p 500 have lost more than $3 trillion in market value since the beginning of the year. that is more than the russell 2000 index of small cap companies combined it is alarming everyone is wondering how much lower can we go? we keep going lower. >> gunjan and lisa, thank you. we will need your advice soon. we appreciate your time this

morning. coming up, disney reporting subscriber growth. the cost of raising those customers is raising eyebrows. we will dig into it next this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

. shares of beyond meat are tanking. revenue also fell short. the company said it took a sizable but temporary hit to gross margins. specifically, its plant-based jerky. executives said the first quarter is expected to be the low point for its margins in 2022 and jerky production should be more in the second half of

2022 i tried it i tried it, but then i -- >> you'll eat anything you're like mikey. >> i'm like the raccoon in the garbage can. come over here, you've got to taste this the smallest bite and then i circular filed it. in fairness, do you eat regular jerky, sorkin? you do >> i like turkey jerky >> i got some of that stuff, too. it was prreal maybe it's not the plant-based jerky. it might be just jerky in general. i would never buy any of this stuff. >> if they said they'll be more efficient in producing this stuff, does that mean there was more demand than they could keep up with? or it cost them more than they thought it was going to, to make this stuff >> it sounds to me like it was not -- i don't know. are people rushing to buy

plant-based jerky? and is that much healthier or better for planet or something if it's just as bad cholesterol wise >> it's a planet thing >> the reason i don't eat it, it sticks around in your stomach a long time. >> that's a problem, too you don't want things lingering down there you can feel the linger. here's another thing i have no experience about this, andrew, and i don't think you do either and it's not 7:00 either, but shares of bumble are higher. a revenue of $211 million beat assessments. it is a dating app it also maintains revenue guidance anyone know the difference between this and the more -- >> bumble is the one where the women get to -- we've had the ceo on, where the women get to make the advances and say okay, i'll take you, not you

>> basically, my entire dating life like in my 20s. >> basically >> it might not and very active site >> not for you >> you remember, sorkin, you ever remember being single >> i didn't live in this electronic world so no. >> i don't think it would matter if they can swipe and see what you're all about, in the bar or electronically, i think they might have similar results i don't know >> i, i -- >> you swiped on both of us in. >> you guys are more like brothers >> we have a debate about disney whether you'd rather own disney or bit coin. a warning that content production expenses would keep rising we want to bring in the senior media and entertainment analyst. good morning to you. >> good morning.

>> where the prices today, given where things were, i don't know if we should be comparing it to where it used to be. does it make sense what do you think this thing is actually worth >> we did lower our price objective to $140, simply to reflect market conditions. disney has performed well through the pandemic as you said, the disney plus subscribers were positive. it was a good beat at 7.9 million net adds, versus expectation of 5 million the theme parks are doing incredibly well, and the film lineup looks to be very strong, and they got off to a great start last weekend "dr. strange. so basically, their basic business is doing extremely well but the stock started to turn down in the aftermarket when the cfo said that second half outs

would still be stronger than first out but the gap wouldn't be as wide as they thought at the beginning of the year. we didn't change our number, it's 42 million. >> this is a multiple story. how much is the market going to assign value to streaming businesses in an environment where netflix is no longer worth $700 a share, right? >> absolutely, which is why we moved away from some of the parts. we're valuing on a p ee basis t we're looking at a consolidated basis with the streaming losses, and we now value it at 20% to 30% of the markets they swing we're use ing a 30% positive to

the market >> rich greenfield saying he thinks they should sell huglu ad try to buy roblox or net niflix something else, you like that idea >> i'm not touching that one >> do you think they should be making acquisitions in this environment? comcast, they have a balance sheet, cash flow you would think this would be an opportunity to buy lots of great things >> well, comcast is a different story. disney plus is actually doing very well. hulu, which is one third owned by comcast, it will eventually control, but disney has the scale, the global scale. you can see how many subs they added. so the issue isn't their scale their content is great and, as you mentioned, they're increasing the incremental

context. when you get to the content cadence in fiscal 2023, when we see steady state, the numbers, the net adds are pretty strong >> we are deeply appreciative of you joining us this morning. hope to see you very, very soon. thank you. >> thank you coming up, the world's biggest stable coin. we'll talk about what atth means for the overall crypto market after the break. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire want more from your vitamin brand?

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good morning, and welcome back to "squawk box" right here on cnbc, i'm andrew ross sorkin. joe and becky holding down the for the at the nasdaq market site in times square it's an interesting moment we're about 90 points on the

dow. we're going show you crypto. that may be the tail wagging the dog. the big story has been the slide in cryptocurrencies. bitcoin down 40% this year we'll have a lot more in just a minute at one point it dipped to the $27,000 range. >> i'm not following that closely. >> tick by tick. in the headlines this morning, elon musk could be in more hot water with the sec the agency is investigating musk's april disclosure of his stake in twitter investors who amass more than a 5% stake are required to file within ten days. his holdings reached that level march 14th, but his disclosure didn't come until april 4th. we're going to speak with jay

clayton about this in the next half hour. one winner is the u.s. casino industry the american gaming association said casinos took in $5.3 billion in revenue in the month of march, the highest ever which wrapped up a record first quarter. casinos have benefitted from pent up demand we have fascinating quarterly results out from wework it was above their prior guidance growth sales reached their highest since the first quarter of 2020. they did lose $500 million the stock up of course, i don't want to say it was, it wasn't a pandemic darling per se, but they sort of oddly came back during the pandemic, and i think a lot of folks have been looking at that company in part because

it's like so many that has been losing money, continues to, and cash is king at this point, joe. >> is welost about ework >> what's welost >> it's a netflix show with jared leto >> it's wecrashed. he plays adam newman >> once again, i like jared leto, better than the adam newman >> really? >> you don't like jared leto "30 seconds to mars" he's a genius. >> academy award winner. >> he's very interesting. >> my gut on that film, though, the six to eight-part series, i thought i liked adam newman

better than the way he was portrayed. >> i need to watch it. maybe i might change it if i actually watch >> anne hathaway was unbelievable in that show, having said that, i mean, they, they, you know, they twist the knife on the real character. >> if jesse eisenburg was running meta, i think would be higher >> $4.50 was the all-time low. i think it's just about $5 now on this news if you look back at wework, it was at an all-time high of $15 after being taken public and there are a lot of questions about what happens if workers are going to come back, if people will continue to expand wework has made the argument that even if offices don't have

people coming back, wework is the place they want to be because they don't have permanent office space themselves but if you look at the numbers of how many people have come back to work in big cities you're still at much lower levels and if you look at any of the commercial real estate reads, they've been low as well >> they sell the equivalent of a netflix-style subscription, so you can walk in at will when you want, and you're seeing a lot of corporate buyers, oddly, buying that for their own employees it's going to be fascinating to watch over the next couple years how all this shakes out. >> i'm going, we're going to dom chu. anyone see, anyone remember carnack? >> the great carnack, from

johnny carson? >> or zoltan the one from "big. yes, i will tell youright now, and viewers, if you have at thattes p feel,let's point out first of all that lordstown is a very small cap company, worth about $300 million with an m they've been trying to sell some of their assets. they finally have. they've completed and closed the deal to sell their electric vehicle battery plant, everything-else plant in ohio to taiwanese conglomerate foxconn that deal is now closed. and that's why you're seeing a pop in $1.78 share

riffian comes out with a smaller than expected loss, even though it was wider, but what they did do was back their year-end production targets for around 25,000 vehicles that gave investors at least a little bit of positivity if you will. the stock's been on a slide for quite some time. rivian up $1.60 from there in terms of the older, combustion vehicles, ford and general motors are down about 3% for ford, 3.75% for general motors, driven yes , by the selloff. but wells fargo has downgraded them one of the main reasons is they

think both companies may have hit at least peak profitability for the next several months or quarters, because they will have to continually absorb some of the losses tied to their battery electric vehicle operations. so ford and gm are down on that. and you mentioned disney the loss in the revenues coming in worse than expected parks doing well during the recovery it adds more subscribers for disney muss. b i'm showing you a three-year chart, joe, because i want to point out at this stage, this was the pre-pandemic high in disney we are well below. a 30-some percent trend lower >> crypto prices tumbling.

bitcoin fell below 26,000. here's my, i have a print, 25.338.53 is the lowest that i think -- >> what? >> 25,338.53 that's the first time that it's done that since december of 2020 the salelloff comes aste terra plunged. and then the news this morning, tether, the largest has fallen below dollar parity. joining us on the phone is gray scale ceo. we have all kinds of philosophical arguments about the existential threat of crypto, and whether we're

talking about something, if it has no inherent value, according to some, then anything is possible i would point out, netflix at 700 versus netflix at 180 or wherever it is, is a much bigger drop than what we've seen in bitcoin. i don't know where the value on either but, have we learned anything other than this is a speculative asset that's going to move with other speculative assets? all of crypto, and that does refute the notion that it somehow is not correlated or that it's more based on, i don't know, you know, safe place, dollars are being debased. all of that seems to be thrown out the window, just like anything else. it might as well be a nft or a piece of art. >> i mean, joe, you make an interesting point, but i do have to say that against the backdrop of the fed raising rates the volatility that has caused

across markets in general. and crypto markets in general, it does seem like there is a little bit of a liquidity crunch going on and that really there isn't any one asset class that does seem to be, you know, ridsing above others in this kind of environment. >> when interest rates go up, what is it that causes people to sell crypto? that the rationale of owning something that has a fixed number that can't be inflated, for example, that no longer is, you know, that's no longer as compelling or is it that the cheap money just doesn't flow into speculative crypto assets? >> well, i think over a longer time horizon, we're seeing that crypto broadly is an uncorrelated asset and that many investors do think about particularly bitcoin as a store of value or as a digital gold. and so they will look to those types of asset when is there is either volatility or

inflationary environments. i think certainly, what we're seeing over the past couple days during the lead-in about stable coin is recent events that have caused questions that have now investors evaluating various table coins and whether they're functioning as they're intended to do so and because some of them have not, that has put additional pressure on bitcoin and others >> this time around, you're not a technician, are you, michael but what do you think holds? could we go back below 20,000 on bitcoin? in your view? >> i'm not a technician, and you and the crew there know i don't make price predictions but if history is any indication of the future, we do see crypto prices tend to correct, form new bases and then move on to all-it time highs i think many investors and what we're hearing certainly are

thinking about these pullbacks as opportunistic, and that they can buy it cheaper than they could a few days ago, that's an opportunity investors want to capitalize on. >> and you've talked about how institutions are trying to get into crypto, bitcoin specifically, and there are a lot waiting trying to think about how to build that portfolio. are you getting calls from people saying i'm buying right now? i would hope if this is as real as we talked about, there should be buyers left and right, and there don't appear to be >> i think that some investors are likely waiting for things to settle down. you know, the ust or terra had sent shockwaves through the system, and obviously, we're looking at, you know, tether and other stable coins at the moment i think when things settle down and crypto finds its footing you

will find more of those institutional buyers starting to step in and some have indicated that they are starting to take bites at these levels. >> do you think your money, michael, would you feel confident that you won't be thrown in a line of creditors if the excrement really hit the air conditioner at something like a coinbase there would be a lot of things, a lot of collateral damage across the board but coinbase is one we could point to and now we know that it's not like a sequestered account at a brokerage firm, you'd be lining up with creditors. >> i think with the instance of coinbase specifically. and they're one of the largest if not the largest custodian out there. that some of the language that was shown was actually misconstrued and actually dove tailed quite in line with other

market participants who offer trust services or custodial services so nothing about what coinbase shared to the best of our knowledge was anything to do with their operations or their technology instead, the way that they're set up and the way that other custodians like them are set up as well. >> okay, michael, we've got to run. thanks for your time the dow's coming back. bit bitcoins back a little bit the impact of inflation on one of the leading suppliers of paints, coatings and speciality materials. the ceo of ppg will join us after the break. "squawk box" will be right back. as a main street bank, pnc has helped over 7 million kids

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time now for the federal reserve bank of squawk where we look at how the inflation issues are being handled. the producer price index is going to be released at 8:30 a.m. eastern time after a worst than expected consumer price index which increased 8.3% from a year ago and remains near a 40-year high our next guest is on the front lines of the global inflation battle he's the ceo of ppg.

michael, hearing what's been happening in the inflation picture, i know raw materials have gotten more and more expensive. what's been hitting new fterms f inflation and how have you been handling it? >> for ppg-t', it's raw materias plus you have strong demand. we have better supply in china but we're still fighting 25% overall inflation in the first quarter. >> 25% overall that's not just raw materials but all in with labor costs and everything else that goes into this >> energy, labor, transportation, warehousing. there's not a lot of places that we're not seeing inflation rate now. >> have you been able to raise your prices to keep up with the price of inflation

>> historically, we use a three-to-six month lag we're almost in real time. we need to get about 50% so nainflation's at 25% we need to get 10% to 12%. and we'll get more inflation in the third quarter as well. so our customers are having a hard time debating this right now. they see it in their own shops so we've been very successful, and we're pricing faster than we ever have, at the highest rate we've ever had we've never had a 10% inflation in our raw materials or our prices for our product either. >> michael, you say your customers are keeping up with this because they see it themselves in their own shops. you're talking about auto makers and beyond >> absolutely. you touch our products every day, whether it's the phone you use, a can that you drink out of, the plane you fly on all of those products use paint

products automotive is big for us as well both oem, aftermarket, aerospace. and our customers are seeing it as well. >> when we have the cpi, the consumer price index yesterday, it showed inflation up by 8.3% and that spooked the market. anybody trying to put a positive spin on it was saying at least it's not as bad as the month before at 8.4%, maybe inflation is peaking what do you think? is there a sign of a slowdown? >> we're starting to see it level off, not today, but we have seen it slow down in china and europe so we're optimistic that if we're not at a peak, we're very close to it. but for us, we have a holot of underlying good demand our automotive business is very

strong so we still see raw material inflation, but it's moderating but we still see underlying good demand >> the backlog how steep of a backlog, and that just means you can't produce the stuff as quickly as your customers need it? >> absolutely. historically, we don't run much of a backlog, but we ended up the year at almost $140 million. so we have strong demand, especially in the automotive and aerospace markets. so we're very optimistic about getting a little inflation behind us. and then pricing catching up, and then earnings following on after that >> what's the backlog in terms of days. with so many delays, and consumers see it all the time when they want to buy a car, a couch, furniture lawn furniture or something. it's hard to get that stuff, and

they'll tell you you're going to have to wait sometimes months for that to come through what's the backlog you snee in terms of time? >> for most products we're running one to two weeks behind. for the easiest one to look at, automotive oem now you have 20 days that's a good indication for aerospace, we're running six weeks behind, because the demand has really increased significantly. so that's both oem demand as well's aftermarket demand. so for us, we're seeing that aerospace business is really starting to pick up. >> michael, what, what do you pay in terms of labor increases? what have you offered to this point? and what are you expecting labor increases to be for this year? because that's something the fed has to consider pretty closely too. >> well, for the coatings business, most of our professionals are highly paid, so they're in that $15 to $20

per hour to start. and mechanics and electricians and welders, people like that, they're making $25 to $30 an hour for us, we've seen increases of that, and obviously, we're looking at additional inflation as we go forward certainly, we're concerned with what we see with what deere is paying and some of our big customers are paying more automation is going to help us and we're driving those programs >> michael mcgary from ppg thank you. >> thank you, becky. >> andrew? >> coming up, elon musk's late disclosure of his twitter stake. we'll talk to jay clayton about that news and yes, the collapse of crypto and how regulators are thinking about that. and speaking of crypto, this week's on the other hand segment, focussing on what's

next for bitcoin john, what's coming up >> there's plenty of room for bitcoin to bounce back big from here or to go a lot lower we're going to discuss both sides when "squawk box" returns. time now for today's aflac trivia question. andy warhol's blue marilyn sold at auction for $195 million. surpassing what artist's untitled painting as the most expensive work of art by an american? the answer when cnbc's squawk box continues the aflac . aflac! paul is about to suffer a shelf-inflicted injury. luckily, aflac will help cover his unexpected medical bills. aflac! maybe you could use the money to buy a step stool. i have a step stool. so why are you climbing a shelf? the stool's on top of the shelf, isn't it paul... (shelf crashing) yeah... ♪ ♪ aflac!

andy warhol's blue marilyn sold at auction for $195 million. surpassing what artist's untitled painting as the most expensive work of art by an american the answer jean michel basquiat's untitled in 2017. we mentioned the down out about 39 points.

nasdaq has nothing but,, but we see a little bounce in bitcoin >> the market's when it comes to the stablecoin >> there are companies that have a lot of interest futures staked on this. bitcoin earlier this morning touched its lowest level, dropping below 26,000, the lowest level in normore than a week which will come first, more losses or a rebound? bitcoin 20,000 or bit coin

35,000 john thorpe, who is like prescient. very timely. >> it's got to be fresh, but i try to watch everything. it's bitcoin 35,000. hear me out. to hit 20,000, very to drop by 25%, 30% from here even though bitcoin is behaving like a rich asset, there are those who believe in the underlying value, and they will continue buying it and once the speculators throw in the towel, the people who owned it for the right reasons will provide more stability. it lost more than 40% of its value in two weeks last year and gained it all back in less than six months okay, has bitcoin been overhyped? sure it's a long way from being the future but it's holding better than dogecoin once the smoke clears, it's going to be a global fintech

revolution taking shape, and blockchain will be an important part of that, and bitcoin is the poster child for that. >> even holding up better than netflix and a hundred other pandemic-related issues. why couldn't bitcoin fall a lot further? historically, you go back, and w it can fall 80%. it's still not what we've seen historically >> well, joe, on the other hand, about the coin probably hits 20k by the end of the summer maybe bit endy the end of the w. bitcoin was born in 2009, the purest manifestation of the market excess. it's a currency nobody really needs, created by accreter

no nobody really knows. we brelieved in bitcoin because it kept going up you know what we want now? money that can stand still for just a minute. people talk about how bouitcoin bounces back in 2013, it took three years to recover. tanked again in 2017 and took three years to recover i'm not saying bit kpocoin is w nothing. but it's worth less. >> if it went down to 50, people would say, see, it's going to zero the question i really have, john, is, is it the answer to overprinting by central banks in

is it the answer because there's only 21 million? or is it the symptom of it because all that free money moves into a speculative asset like bitcoin, or is it both? >> i think it's clearly not the answer look at the chart of this thing. we really do want money that can stand still for a minute we're entering a time when people actually need their money to like pay to fill up the car for gas. so we'll see what these crypto assets, including bitcoin, do when people don't necessarily need them, but we do need other things >> so would you round 4,000 on bitcoin? would you just round that down to zero? because it's still up from $10, where it was a couple years ago, five, ten years ago. is 4,000 zero? or ten times what it was in 2012 in. >> can i make a call on rivian

instead? >> it just reminds me of thomas the tank that's why i like it so much doo, doo, doo. percy. >> the look of the. >> you have percy. the troublesome trucks >> i forget. >> don't forget sir -- >> you know what i'm talking about. >> i got kids, man they hate to admit they ever liked it, but they loved "thomas the train. >> who was the guy in charge you just said it >> we need electric trains now >> we do i bet you can get one for thomas the tank >> it will cost you. price is coming down, though >> good one, john. "squawk box" will be right back. this is lisa. she's a posh virtual receptionist. when you're busy, she'll answer your calls and assist your clients.

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coming up, jay clay tochb's going to join us plus, disney's not-so-magical quarter. the stock hit agnew 52-week low. we'll talk about all those in athgsnd more when "squawk box" comes rolling on back beep. beep. what up, barry? hey, chuck. aren't you supposed to be on the course? i was, but i need a new driver. oh. what kind? one that hits the ball better. okay... i gotcha. let's go to the hitting bay. ♪ ♪ ( golf balls and items crashing to the floor )

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welcome back to squawk a bunch of things to talk about this morning as the sec is investigating the timing of e-roelon musk's filing. he filed the disclosure on april 4th, which was ten days after he reached his stake of 5% in twitter. we want to talk about that and of course crypto and what's happen happening in that space, but jay, in terming of elon musk, how do you think the sec's really thinking about this >> good morning, andrew, actually, the journal article that you cited did a nice job of

outlining what's going on here, which is, you know, we have disclosure rules that once you cross a threshold, you have an obligation in the market place, the other constituents, the company, other shareholders, to disclose that you have that stake. the report is that there's an investigation and that the stake was disclosed late the sec is going to look at that and i thought the journal did a particularly good job of laying out what the potential remedies might be here in the event there is a violation, including whether there's a disgorgement of ill-gotten gains, because were you able to build a stake at a lower price but that's what's going on >> i, in terms of what the remedy or penalty will or should be, slap on the wrist, more? >> i'm not going to get ahead, you know i have great respect for my former colleagues at the

sec. i'm sure they are hookilooking o the various factors, a range of outcomes as reported in the journal. but i think they're going to dig in as they do, and we'll just continue to watch this space >> can we talk crypto? we're looking at tether this morning, talking about them breaking the buck. obviously, we've had this with one of the other stablecoins in the last 48 hours, and bitcoin has plunged. this is something you've been concerned about for a long time. >> i have been in the crypto space, there are a bunch of different instruments when we talk about stablecoins, there's a range of stablecoins there can be a stablecoin that is back the one-to-one with cash and then there are stablecoins that can be backed with what i would say is other credit instruments or in the case of the one reported on overnight, other crypto assets.

when you get away from one-to-one backing with cash or something very close to cash like short-term treasuries, you're in the area of what i would say is something very akin to a mine market fund, andrew. and investors, the public, users of these should have the same kind of disclosure around any kind of product like that you would have the potential to add stability in times like this over years goes back to 2008, or most recently in 2020, and there are rigorous rules around the amount of liquidity they have to have, the nature of the instruments and the like that absolutely should be a -- in the space. i do believe a well-constructed

stablecoin and whether it's a regulated bank or clearly backed by cash or treasuries is a means to facilitate -- scalable and usable so on the one hand, i see the power of this technology and on the other hand, i'm very much for regulation in this space. >> speak to this one of the other things that's developed in the last 48 hours is a sense that in the context of a coinbase for example, that retail investors could ultimately become creditors of the company if in fact something, you know, terrible were to happen in terms of their own accounts, that these are not protected accounts >> so we, what we're talking about here, and i don't hoeknowe particulars in this case but what we're talking about is another fundamental aspect of our markets. and that is that you have segregated accounts. so in the event a broker has a problem or the like, customers

mow know that they're going to have access to their securities and people often custody their securities separate from their broker, as mentioned earlier in the program. in order to ensure that you have access to your assets and that they are not co-mingled with the rest of the entity it's a fundamental concept in our investment ecosystem and we need to maintain it >> but jay, what does that mean? because coinbase itself is the one that came out and said that customers might be lining up as creditors in this. they now say don't worry, your money's safe, we have no risk o% a bank r a bankruptcy isn't this a call for this immediately being regulated?

>> look, becky, gary and i very much agree on this, that you need to have the rigor and i think that this, to the extent that this is a wakeup call for people to understand that we need that kind of rigor m in this space, that's good i don't floknow the details of coinbase situation but we do need that. >> do you think that the sec's going to actually step in? >> andrew, i think the sec has been stepping in they've been bringing cases,

doing examinations i'd h i'd like to see the government step in. secretary yellin has said that stablecoin regulation can unleash the power of this technology but the sec, rightfully so, their first interest is the protection of retail investors, and they should continue to do that vigorously. >> jay, thank you. >> becky >> thanks, andrew, when we come back, the magic ngkidom losing some of its sparkle. what's next for the company? "squawk box" will be right bac offers investors a broader view. by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge. today, we are translating decades of experience

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to add a channel or streaming service. shares of disney are falling. enn ennings and revenue missed estimates. disney did report stronger than expected growth in streaming subscribers across all its platforms but they warned expenses would keep rising joining us, a media engine executive chairman and cnbc contributor, and matthew beleny.

founding partner a media company. beleny, baloney. i can get in serious trouble tom, you love streaming. after this latest three-month period, have your views yes involved about the future of streaming on either side, on how much you can draw people in and on how much it costs to draw people in. >> well, my views of the macro future of streaming have not changed dramatically because a cable satellite bundle is going to continue to decline. and with that, streaming subs both in the united states and glo globally are going to continue

to grow. my view has also not changed of the difficulty of traditional media companies. disney being the poster child for that making this transition in a way that is going to increase the value of those companies, because they're coming from the best media model known to man, where you get subscriber fees and advertising revenue and most of those fees coming from homes that neff ver watch your channet a place where you've got to get paid for just those homes at that do watch you. and it's a much tougher model, the streaming model. and disney's continuing to get more credit. just in your introduction, for its sub numbers than it should half of those subs that it got were from india at that are worth very little. the whole reiteration of its guidance that ultimately, disney

plus is going to have 230 to 260 million subs tells me very little without knowing how many of those subs are actually going to come from asia. 50 million today come from asia. 100 million of those ultimate subs are going to be coming from india at incredibly low prices that tells me very little about the ultimate value that they're creating for disney plus so my views there of the difficulty of a company like disney building value is, hasn't changed. i think the market's gotten more rational about what its streaming value is i don't think the market has fully taken into account just how difficult it's going to be for the traditional business, the decline in the bundle, cord cutting, ad rates being hit by a tougher economy, the parks being hit by inflation and a tougher economy. a lot of that i don't think has

been fully digested. >> matt, you would think that with what tom is saying that nobody watches there's cord cutting and streaming is not what it was cracked cracked up to be can you explain one thing, matt, in your view, why the pandemic, disney, with the promise of streaming or netflix, was valued at so much more than the reopened disney when all of its other assets are firing, presumably, are going to fire on all cylinders but slow down in streaming which wasn't the profit generator anyway. so why during the pandemic and now, or disney, with all disney's assets now, parks, movies, theaters open, can you explain that >> it seems silly, right and i think this is the product of what wall street briefelieven

during the pandemic while we were sitting on our couches. that the total adjustment was going to be 7, 8, 9, perhaps a billion people and that ration ale has completely changed netflix's runup was that it could outbuy everybody in hollywood. they could raise whatever money they wanted. it got to 220 million worldwide at a pretty high revenue per subscriber, but everybody else in hollywood were chasing. all the other stocks were valued high because they were considered in part streaming companies, and now that's all coming down to earth >> tom, do you at this point have a long-term positive view on the stocks of either netflix or disney? if anybody loved them at two or three times where they were, netflix in this case, shouldn't be this be a time when could you

at least start to go in and add to your position >> yes i mean, personally, my view of netflix is that it is hugely undervalued here obviously, the market was very spooked by its sub numbers, and clearly the path to 300 to 400 million subs is going to be a slower one but look, you do have 600 million cable satellite subs around the globe and eventually, those are going to become streaming subs, and netflix, in all likelihood, is your first streaming service in as homes transition. and the path to 300 million or above creates a value for netflix well above where it is today. you know, key to this, people focus too much on the sub numbers. pricing is critical. and even though netflix had a bad sub quarter last quarter, its pricing in the u.s. was up

>> okay. matt >> quarter per quarter was down. >> we got no time. we got a hard break. but matt, you put on you're a buy side money manager, would you buy either of those or neither in. >> disney is the fully-diversified company. netflix is in one company, essentially. i would go disney. >> sorry to cut you off. but we got to make money, too. and now you just told me nothing's any good, tom, streaming and cord so i don't know what we should do thank you both we have mark moebous coming up and we have economic numbers economic data at 8:30 to show us what's going on with the ppi

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what's it like having xfinity internet? it's beyond gig-speed fast. wow. and it can connect hundreds of devices at once. that's powerful. unbeatable internet from xfinity. made to do anything so you can do anything. good morning welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square.

i'm becky quick along with joe kernen and andrew ross sorkin. we started the show with the dow down by about 200. it rallied to come back to down just 40 points, but now you can see it's down by about 250 points s&p futures are down by 42, the nasdaq off by 203. maybe worth pointing out that the dow is on its way to posting its seventh negative week in a row. if the declines keep adding up the dow industrials are down by about 12.5%. s&p as of yesterday's close down by 18.3% and the nasdaq yesterday, down 29.9% from its all-time high you are talking about with these declines this morning pushing the nasdaq down by about 30%

from its all-time highs. these numbers are getting perilously close with the dow down or the s&p down almost bear market you know, again, if you add these declines that we're seeing today treasury yields have come under pressure after rising significantly pretty quickly right now you're looking at the ten-year sitting at 2.826% just yesterday we went to 3.1% and beyond all of the complex down. and cryptocurrencies suffering again. another day, another day of suffering. earlier today, bitcoin dropped below $27,000. joe saw a tick of $25,000. that would be the first time since late 2020. ether also getting hit, down another 9% and we're keeping a close eye on those so-called algorithmic

stablecoin terra ust trading right at a dollar. and it fell to less than 30 cents yesterday. right now sitting at about 51 corrects a cents. tether was at 96 it is the third-largest cryptocurrency coin market cap says it's worth more than $80 billion, or at least it was tether's chief technology officer said it has reduced its exposure to commercial paper, instead holding most of its reserves in the u.s. treasury. but all these questions about who holds what, what's related, what it means from the perspective of long-term capital management and global, some of the concerns you saw there, it's enough to put a lot of people, have their

nerves on edge with this stuff, andrew >> absolutely. a lot to chew on and think about. and then of course trying to figure out what it means to the broader market for that, we want to get over to our friend, mr. santoli, as investors try to figure out if we're getting close to a bottom. what do you think, mr. san told s santoli >> not all the signals are lining up. it's persistent weakness the market keeps getting kind of incrementally lower and a little bit more oversold, but it's monot the kind of rush of panic. big institutions reducing their exposure bounces can happen at any time whatsoever but what we do see with a 18-month trend, to the end of october 2020, you've given up all of it since march of last

year so essentially, the first quarter of last year is when we first got to these levels. i came into the week saying there's a whole lot of work that seems to be pointing to 3800 to 3900 we'll open up below that or around the 3900 level as we, as we stand right now with the s&p. now one of the reasons the overall market has not gotten fully washed out is some stuff is holding up pretty well. but 80 stocks in the s&p are down less than 10% various value plays are doing well pure growth, the most aggressive, fastest-growing stock is in the s&p down 31% the stuff that's smaller and outside the s&p has obviously been blasted more. take a look at the volatility index. it's been steady around the 30 level. clicked up to 36 or so

this index seem as little bit stalled out here in the 30s. one reason is again, we haven't seen all stocks rush lower at once you haven't seen that real moment of panic. it's much more look, we've got to lower our equity exposures. some think we need to spike up to 40, but maybe it's just the environment we're in until something seems to really crack. it's still too high for a lot of these systematic traders to say okay, we're going to take on more risk. goldman saying, arguably, vix should be lower. >> my two things one is, do we think that we're really seeing forced selling maybe it goes to the issue of whether we're getting flushed out. most of the conversation narrative is about is there still more to go on the down side, there's very little conversation about is this somehow a great buying opportunity just yet. >> that is true. are we seeing forced selling

i don't know for sure. certainly have no reporting on that but some of the character of the selling, you know, matches up with at least kind of urgent liquidation of positions, of stuff that's been held for a while. we know about the big headline losses in things like tiger global people are tracking the holdings of tiger to see if you have extra pressure whether it's people pulling money out. it almost doesn't matter at a certain point. because if you think someone else is trying to liquidate you're going to get out ahead of that and what's down the most causes you to sell the stuff that's not down the most. we could be very close to saying whoever needs to sell has already done so, and maybe can you find footing here. the value somebis being surface across the board >> mike santoli, thank you, sir.

appreciate it. joe? >> let's broaden our market scope here and talk opportunities around the entire world. joining us is veteran investor, mark mobius. founding partner at mobius founding partners. and and we have our own unique situation here, mark, in the united states in terms of the fed and other factors. the world seems to be dealing with a reflationry environment as well. are there differences that you see? that are specific to the united states right now and what do you think about the u.s. equity markets? >> i'm back in dubai, but yesterday i was in las vegas and i tell you, there's a lot of money in las vegas people seem to be sort of giving up and throwing everything in the market, that is the gaming market so there's plenty of liquidity around but i think what's happening is you have these cryptocurrencies

driving a lot of pessimism when you see the bitcoin and other cryptocurrencies going down, it's a leading indicator of a pessimistic outlook so now it's pick and choose. as you just heard. value stocks are doing well. and it's a good idea not to look at the index generally but to look at specific areas in emerging markets the place to look is exporters. because all of the emerging market currencies are down against the u.s. dollar. so what you want to do is get a company that is paying in local currency its workers and splupplies and exporting to the u.s one good example of that would be palm oil exporters in indonesia and asia. there's a tremendous demand and growing shortage that would be one particular area that would be of interest >> so you think at this point,

in terms of crypto leading, you would say crypto is the dog. the market is the tail at this point. and what does that say about the inherent nature of crypto at this point, in your view, mark? >> what it says is a lot of people have their hopes in crypto i'm talking about the guy on the street, the guy that normally would not be into stock markets. and then the big boys in crypto are beginning to realize hey, maybe this is the time to cash out. so they begin to sell, and of course they're also selling into their stock market as well because they're pessimistic. it's a combination of two things the guy on the street and the big boys rushing to the exits. >> let me ask you this i was going to ask mike santoli who was just on, about historical precedent there hasn't been the macro

flush where the vix gets up to 40 or so, and i've seen a few of them back in '87, at other times. is it possible that you have little individual stock, sort of flushes, like netflix i'm thinking it can't get much worse than that and take your pick for some of the high-flying tech stocks across the board the pandemic stocks. that's as bad as it gets in the worst bear market. do you need an overall, the entire, the, let's say the s&p, does the s&p have to get down to levels like that to flush everyone out where you actually make a decent bottom in or could we make a bottom where the vix doesn't hit 40, and it's just concentrated in a bunch of the high fliers. what have you seen in your, in your life? >> we're seeing the tech stocks that don't earn money, they don't get, there's been a lot of

ipos in the last few years coming out, the companies that don't earn any money, and those stocks are getting hit badly, even though they had raised billions of dollars. if you look at the ipo market, generally the emerging market is in bad shape a lot of ipos are being canceled most were tech based with this hope and promise of profits in the future, but no profits now so that's what i see, and that's been drive the downturn for example in the chinese market. and of course chinese market is down the emerging markets index goes down so now pick and choose, and be very specific in what you want to look at, particularly companies that are actually earning money. >> i guess i'm just looking for what inning we're in you'd call this a bear market i guess at this point. what inning are we in, in terms of continued selling? i don't know whether you want to do duration or how far we go.

>> i think we're probably going to go lower. it looks like lot of people are beginning to give up hope. and, as i mentioned, the crypto side, to me, it's a leading indicator, so we're probably going to go lower on the s&p 500. but, again, this is a great time to be picking up some bargains, if you're looking at the right stocks >> it's just funny, you say a lot of people are giving up hope that's a bottom, isn't it? we're not quite there yet. >> it's a beginning. it's only when everybody's given up hope. >> when everyone does. okay mark mobius, thanks for the global perspective appreciate it. he said we're going lower, andrew, i don't know how much longer, but it sounds like he's with you on that >> am i allowed to ask you what you're doing down there besides looking like a possible candidate for something? >> candidate for what, though?

i'm meeting with my backers, as you might imagine, and, you know, we're, we're glooking into what the possibilities could be. what's possible. >> there could be some openings. >> i have nothing to announce just now but i can't deny that i would -- no. don't take anything from any of that on assignment for a reporting trip, and we will bring you some of that reporting very, very soon the companion number to the cpi data but next, would a new opec be successful in keeping energy prices manageable for americans? that's the question. check out the price of crude oil right now. wti, $103.53 fortitude gold producing high grade low cost gold

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well, another day, another twist in this year's oil story as the pushback against opec ramps up, it's possible the west could create a competitor to the group. brian, i guess their is shows yu how far these two sides have come

you're not talking about frenemies anymore, you're talking about basically competitors. >> it's like "days of our lives" or "as the oil world turns." you've got buyers agents and sellers agents mario draghi telling reporters the other day that he and president biden recently discussed creating sort of an anti-opec, basically, a group of countries, a cartel, kind of, that would represent oil buyers. opec, which stands for organization of petroleum exporting countries is primarily made of oil sellers. whether this is something really being discussed or krdraghi usig it as a scare tactic, it's not clear right now. and it's not clear what companies like the u.s. or italy or whatever would be in it i pinged a few people that i

trust. mike bradley put it to me this way in an e-mail, quote, creating a buying cartel in order to encourage a production response is useless if the commodity just isn't there and that's really the issue. that most of the opec nations do not have much or any spare capacity outside of the saudis and uae. but in their deal, they've all got to do it together. that's part of the opec cooperation. all of this kind of another jab against the growing fight against opec and the white house. despite the record release from the strategic petroleum reserve, which actually kicks off on sunday the big 160 million barrels, that hasn't started yet. that starts on sunday. there is also, by the way, the no oil production and exporting cartels act working its way through congress, which would effectively permit the united states to sue a group or nation that is involved in an opec that

it might consider to be anti-competition, a price fixer, et cetera. there's a lot going on, becky. there is one kind of bit of irony. italy, mario draghi the prime minister coming out, they remain one of the largest buyers of crude oil to this day because russia owns the biggest refinery in italy, and that is the only way it can get oil if you can make sense of all this you are lot smarter than i am >> no, i can't what's opec's reaction to this because you can understand in desperate times why people start getting more and more aggravated and why things like the legislation comes about, but it never seems to work when you get even more in your face on things like that. what's opec's response >> well, the uae minister's coming out saying he thinks oil could go to 300, if this nopec

legislation is passed, because it would create in his mind, chaos in the oil market. some would say it would have the opposite effect, as it crashes and the countries went free-for-all when oil went negative and the saudi-russia price war at the time. opec has been around since the '60s by the way, this nopec legislation has been around in some form for a long, long time. comes up, oil prices go down, then it goes away. then it comes back but listen this new version, this one that's going through the senate, just passed a senate judiciary committee, it is bipartisan. from grassley and leahy. but you have two democrats that are on board with this it goes to the senate. if it passes goes to the house

i'm trying to go back to it's just a bill, then it would go to the president to ostensibly sign it it's unclear what the president would do but if you remember, president biden who was then a senator urged president clinton to sue opec, i think it was in 1992 or thereabouts. this is a long history, becky between this, and certainly, it's not going to do anything to further relations. >> right >> between, particularly -- >> you have bipartisan support for this because everybody wants to look like they're doing something about inflation when in reality, there may not be a lot they can do. and some of the measures could exacerbate inflation and make it worse from here. but nobody wants to look like they're doing nothing. >> we live in the northeast. the number of refineries i'm not saying we should build new refineries, but the number of refineries is down by half over the last 15-20 years. we're trucking in jet fuel from

ohio so northeastern airports don't run out of aviation fuel and look at gas bud eyedy this morning saying truck stops have to bring in oil from the great lakes. we're burning diesel to burn more diesel. >> i'm just a bill on capitol hill the rest of the day ♪ i'm just a bill ♪ >> when we come back, shares of apple taking it on the chin. what should tech investors be watching for this week plus pdurocer price inflation data on the way. we'll bring it to you live "squawk box" continues right after this s.

coming up, the number of the morning, our inflation check today's inflation check du jour. we have a panel assembling as we speak. we'll look at a bunkch of boxes and becky will probablsay y pp because it's producer prices

>> yeah. >> stay tuned for that you're watching "squawk box" on cnbc ♪♪ ♪♪ take the world by cloud. accenture let there be change.

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on cnbc. we are a few seconds away from new inflation data yesterday we got the cpi that was hotter than anticipated and drove the markets down initially. dow futures are down already by 218 points the nasdaq off by 180. the s&p down by 35 if we could check treasuries, i think we've been around 2.8 for the ten-year rick, take it away let's see these numbers. >> yes, we're expecting of course our producer price index read for april, along with initial and continuing claims. if we look at the headline, ppi up half one percent exactly as expected, and just to put a face on it, in the rear view mirror we have the cycle high at 1.4%, so a nice big drop as predicted. if you strip out the all-important food and energy known as gore. that follows the cycle high of 1%, which we saw on several

occasions. if you strip out food, energy, and trade, that's exactly as expected up .6 and the high watermark was up 1%. let's go to the year-over-year numbers on headline. 11%. 11%. this follows 11.2%, which was the cycle high, but it's hlike yesterday, it's down, but higher than expected. year-over-year, 8.8, one tenth light of expectations and that follows 9.2% which is the cycle high and finally, if we look at ex-food, energy and trade, it's up 6.6%, excuse me, it was expected up 6.6% .3 hot and it follows 7%, which is the high watermark on several occasions. when it comes to initial jobless

claims the best number has b been 166,000 for mid march and it's 1,000 more than last week's revised 202,000, and continuing claims, they never disappoint, to they? 1 million, 343,000 this is really close to going back to 1969 levels. now there are revision ts that have trickled in i'm sorry, but they're important. if we look at the headline number, up .5, the 1.4 was revised to 1.6 so the revisions are higher, but yet we do see moderation interest rates, well, they continue to drop 282 for ten is interesting because the interday high from earlier this week was

2. -- 3.2% and it might be the first real area that we can claim is going to be a standing high for a while. becky, back to you >> rick, thank you joining us right now for more instant reaction to this new inflation data is dana peterson, chief economist at the conference board jared woodard, the head of etf strategy and mike santoli is here, too. let me ask you first, dana, these numbers are kind of interesting. it's kind of hard to imagine how you meet on the monthly expectations for ppi but misso the annualized i guess this has something to do with the revisions that they're going back for the comparisons that they're sieg oeeing on somf these things, too. we were in line or that the year-over-year number was up a little higher. >> you get the main concern that

prices are higher year on year, and they're quite elevated for ppi. this means prices are going to be passed on to the consumer our own survey shows that's what they're doing in the united states even though you may have volatility month to month and maybe it leads to expectations, maybe it doesn't, there's a lot of inflation in the pipeline and consumers are going to feel it >> the pig is making its way through the snake. do we take it as good news if we've seen potentially the high watermark and come back down from that? >> i think it is good news if we have seen the high water mark. and really, we do need the fed to step in, raise interest rates but not be too aggressive, such that it causes a recession, because we think the fed does not necessarily want to undo all the good work it has done in terms of achieving full

employment >> mike i want to give you an opportunity to lo look through h market reaction. maybe people are thinking it through at this point. >> at least it was the absence of a new negative, which i think would have been a hotter number. ppi has indication for corporate profit margins but not always the biggest market mover people can see the idea that we have reached peak inflation in this number because the small month-on-month decline but on the other hand, what's the destination in terms of how fast it might decline from here. right now i still think we're in suspense this month, only gave you sort of half the helping of evidence that you'd want to see in that

direction. >> jared, how do you see this rorschach test >> i love the pig in the snake analogy. i think this pipeline is coming through while it's possible to argue that some of these very small peaks we're getting in consumer data this week and producer data, the prices are still rising, if they're not rising as fast as they were before, that's arguably good news, but the fact that prices are still rising incredibly quickly is a big problem for markets. we've been suggesting that investors maintain higher level of cash, more dry powder ahead of roll tvolatility >> you think there's a lot more room to run to the downside at this point, jared? >> i do. the fed's incredibly behind the curve. they've tried to regain credibility. but these prices we are seeing now are from phenomena that we've been watching for many months what's not fully reflected in the market and not in the data

yet is the effects of chinese lockdowns, what that's going to do for global markets. motte not just for the chinese consumer but the global supply chain. some of these things have long lags and they're not always easy to forecast. we'd rather remain cautious until it's really clear that inflation truly has peaked >> we spoke earlier with the chairman and ceo of ppg. he thinks we've seen the high water mark in inflation. in the first quarter, it was 25%, when you add in his input costs, ralabor and energy and everything he's still having to pass it on to the consumer when does the consumer roll over to this point we've seen an incredibly healthy consumer. they still have more money than they did pre-pandemic in their

bank accounts. what point do you look and say this is where it's more concerning where people start to run out of the excess money that they've had to this point? >> well -- >> dana? >> potentially, the second half of this year we could see consumers starting to pull back. our own survey suggests that consumers are already starting to tamp down on discretionary items. they're also buying cheaper goods, so this is already in the pipeline and we should probably see it in the second half of this year and hence we have very slow growth in the second half of the year for gdp because consumers are likely to pull back. >> do you think it's going to be a recession, even if it's not call thad? do wa called that? >> we do have positive spending

from the government in terms of the infrastructure bill f that doesn't really roll out there is the potential you could see a couple negative quarters and if commodity prices continue to rise if the war in ukraine worsens, then certainly, you'll see faster inflation, the fed may be more aggressive, and that could lead to a couple negative quarters, but, again, that's not our base case. >> jared, what did you want to say in. > >> given rising inflation risks, given potential for a more hawkish fed, i think investors have to think very carefully about the kinds of risks they're managing in their portfolio, are they getting paid the kind of income that justifies owning assets today, growth stocks have been incredibly challenging.

as fed policy gets more hawkish, it makes a lot of sense to shift more toward income and dividends and more defensive parts of the market >> you've said something i've heard from a lot of guests in the last week or two that you're going to be very cautious until it's abundantly clear that the inflation picture is better, that we've gotten past the peak. markets move more quickly. they anticipate those things that's why we're trading at those level now, a lot of spending taking place. a pretty decent economy in a lot of sectors of the wouldn't the market parse that out ahead of time and don't you miss it if you're waiting to see the numbers on the print? >> that's a great point, and if we in a garden variety downturn in the economy or anticipating a garden variety recession i would agree. but this is different. we're not dealing with a

downturn in unemployment, question be rapidly addressed that you 180-degree turn in fed policy that's been the playbook for the past several decades this particular moment in the economy is yaumgsly unanimously different. >> we were talking about how it's not working this time and people have really gotten punished pretty severely >> absolutely. we came off a year when we didn't even get more than a 5% pullback this year, every 5% rally off of a low has been a very good opportunity to sell. that's been the reorientation of the market but i also take your point that it's very tricky to try to extrapolate how long and how deep this environment will persist. a lot of the similar dynamics

were in place in early 2016. we thought it was a deflationary panic and bust at that point in late 2018 now granted, the fed had room to kind of throttle back and soothe the markets, and maybe it doesn't right now. but i do think it's very tricky to say we are now in a new regime we know exactly how it goes from here even now it may be satisfying to play defense, harvest some gains over the last three years. three-year returns are still not that bad on a look-back basis. >> thank you both for joining us coming up in just a moment, jim cramer's first take. plus, we'll talk about apple's unusual drop this weekend. what it could mean for the tech giant. stay tuned you're watching squawk on cnbc

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shares of ford and general motors falling this morning. wells fargo says they're double downgrading both stocks, i guess they went from overweight all the way through underweight right to equal weight. 2022 could represent a profit peak for legacy auto makers. earlier we learned cathy wood invested in general motors for the first time the arc. autonomous robotics etf bought

about 6 million in gm. the purchase was notable the stock buy came after she met with mary barra. jim cramer tweeting oh, my, like the gm kiss of death take a quick look what we're dealing with another four, down 8%. that looks like a double diamond on one of the back bowls jim joins us now from the new york stock exchange. jim -- >> double down was so gratu tuss now you double down on them. i think gm's doing well. i think cathy was the kiss of death. they act as if nothing's wrong i think gm's doing pretty well, but people don't want to own that stock going into recession. let's deal with the setups not as bad

there's a lot of food and drug that's good. i know people don't want that, but it's working and there are a lot of companies that have come down a good bit general motors offered a dividend, which mary barra didn't want to do. it is true that cathy wood is the kiss of death. you usually don't want to say that, but i think you have to throw out all the bromide and speak truthfully here because the viewers deserve it she's awful. >> i've been asking because maybe i'm just looking for some silver lining of some type but do you ever remember a market bottom that's made before there's an overall capitulation across all indeces i mean, is it possible that the individual leaders could have their own little, you know, where everyone just basically pukes up everything that they, i mean, you don't get netflix or even the big tech leaders.

aren't they down enough to make a real bottom individually >> i think that they're, you know, people just sell them because they're a source of funds. we've had bottoms that are caused by warren buffett coming in and buying. we saw that with bank of america. we've had bottoms where they wiped out 330 new companies that became public between 1990 and 2000 there has to be more destruction. we had a bottom, we had a 2018 but that was with the s&p at 13 times earnings where 16 to 17 times earnings so we're still a little too high but the panic's pretty thick you have to find out how much systemic problems come from tether we don't know because the information's always been sketchy. i mentioned coinbase, because they picked on gary genser

we have to watch the tech companies come in a little bit more, to the point where the multiples are lower. but when i look at a tether, i want to know how much is in that i've been complaining about tether for months and nobody really cared, and then i stopped complaining about it because i thought i was a broken record. it turned out to be a pretty good record. i say we stay cool >> the articles written now are not near bottom, the articles written now are that we have a long way to go >> i don't think we have a long way to go. we have to see some companies run out of cash. we have to see more margin calls. we have to see companies like dutch bros say we can't make the numbers. we have to look at what cathy wood wants to buy and make sure that her homework is shoddy, and she's not sure what to do. so we have to see these telltale

cases of people who are blowing up or leaving, and when they're done, and the price multiples say 13 or 4, we'll square some things up. but don't and hero here. there's lots of companies that are hanging in i think oil's money that -- the amount of oil that the president is bringing down from the spr is astonishing. some people say it will be at emergency levels soon. i think there are things that are good i think there's a lot of lies being told about certain stocks that aren't bad. but then again, i think that there's a level of genuine fear that comes from people who have never seen a business cycle, joe. and you and i have seen a business cycle that's what we're in >> who do you think is being -- who do you think is being lied about? >> disney. >> who's telling the lies? >> the people who took the stock

down from 108 to 98, the cfo saying the second hatch was going to be bad, which it wasn't if if you parse her comments, she did not say that i could say she's lying, which she never has, or the analysts put together a negative story that wasn't there. christy mccarthy gave two calls last night and neither said what the others are saying. she's been right, critical, when times are critical, people know her as being a straight shooter. when the company was in trouble, she's talked about it. suddenly she's being viewed as someone who took numbers down. that's not true. you can sell it. i don't give a damn. sell it. but be honest she didn't say it. >> thanks, jim >> i'm sorry i can go along with the crowd and say she joois ust another lr and should work at coinbase. no

tempting a potempkin village. it's never been this good, andrew >> we may touch on this in about min nine minutes, we hope. see you then the new cnbc investing club. sign up to find out more at cnbc.com/jointheclub or point your phone at the code on the eryoen and it will take u the. "squawk box" will be right back. . what's up, peyton? good morning, peyton. hold for peyton. they'd huddle.... welcome to the peytonverse. such a visionary. game plan... you go. no, you go! and call audibles... double our investment in omaha! omaha! omaha! omaha! or you could use workday. omaha. the finance, hr and planning system used by over half of the fortune 500. for a be-agile-like-an-mvp world. workday. for a changing world.

i'm dan o'dowd and i approved this message. tesla's full self- driving technology. 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 little more than a half hour to go before the opening bell on wall street. dominic chu has the top premarket movers what do you have >> more headline specific stories on the earnings front here tapestry, known formerly as coach, kate spade and others, shares up 7% because tapestry comes out with earnings and revenues both better than expected but a mixed picture with regard to margins they were lower because of among other things higher fright costs and that caused them to cut its outlook going forward.

up 7%. next up, shares of six flags, also up in the premarket right now, big theme park operator, up about 4.5% six flags comes out with a smaller-than-expected loss, better-than-expected revenues and it says it's being helped by more attendance at theme parks and they're spending more per customer six flags up on that news. and tesla right now, those shares under pressure in the premarket, currently $704. we did briefly go below $700 per mark there that's important because we opened at that level back in february, but you have to go all the way back to august of last year to see a trade below that $700 mark. so tesla, remember, andrew, at the peak here, was worth about $1.24 trillion it's worth closer to $740 billion right now for context, like losing an entire meta platforms during that span >> i know we have to go, but do we know at what price this gets

complicated for mr. musk in terms of his bid for twitter and how those margin loans work? >> so, what's curious right now, the moving parts are still there right now, but it's the combination of not just the twitter shares but the test la ones as well with regard to the margin call aspect, they're trying to figure out what the handicapping is for this it appears with twitter shares falling the way they are and tesla shares falling in tandem, the deal likelihood continues to fall and fall. right now we have to check what the odds are, so to speak, but right now it doesn't feel as though it will be one of those deals that even at a 50/50 chance of getting done with the current math >> either it doesn't get done or does he come back to them, i would argue, with a lower price, says, look, the world has changed? >> the world definitely has changed. whether or not twitter shareholders agree we that, that's something else.

>> apple looking at more losses in the premarket, relinquishing the title of the world's most valuable company dan flax, senior research analyst, joins us. what do you think fair value for apple is is this one of those stocks that's got -- the baby's gotten thrown out with the bath water >> i think it is one of those where the baby has been thrown out. there is clearly pressure in china from a demand standpoint and the supply chain we all appreciate the risks from consumer -- weakness in consumer more broadly, certainly in parts of europe. i think what will matter in the next several months is their ability to demonstrate the execution on the product cycles. we have the developer conference next month we'll have new iphones later in the year, mac, they're executing well new silicone, services and

wearables. went we look out, we see a lot of opportunity here driven by innovation, the health of the ecosystem, and future growth >> dan, in terms of the multiple, what's a fair multiple for this company given all of the other multiples that have come down? >> when we look at the free cash flow generation or the potential for the precash flow generation over the next several years, we think the shares are very attractive on that basis, andrew what's changed over the last several years is really this broadening of the growth drivers. it's not just about iphone so i think a higher multiple is warranted. we see significant upside from here they're going to clearly have to navigate their way through a very choppy environment. but we still see a lot of opportunity. >> okay. dan, we appreciate your perspective on apple we'll be watching that stock as the rest of the world does as well

today and throughout the future final check on markets, it looks like we'll open in the red, dow off about 148 points, nasdaq off 170 points, s&p 500 off about 30 points, and crypto -- should we show people crypto, guys what do you think? flip the board around, bitcoin at -- right there -- $28, 298. make sure you join us tomorrow "squawk on the street" begins right now. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer david faber on assignment. futures trying to stem further losses as core ppi comes in lower. sentiment around disney, apple, downgrades with the automakers and credit card companies, tesla below $700 inflation fears fueling relentless selling on th