to come down a little bit. >> brenda, sarat, thank you both a quick final check on the markets. have a great weekend, we'll see where things stand i'll see you from davos, switzerland next week. >> see you on the airwaves >> it's supposed to be raining there. no snow. >> oh, no snow, that's good. safe travels, see you next week. good friday morning. welcome to "squawk on the street." china cuts a prime rate, hong kong up 3% overnight plenty of earnings to watch on what is likely the seventh consecutive week lower for stocks a decent open, china's central bank makes an unexpected rate cut as growth there crumbles >> and shares of amazon are down 30% in a month

citi removing it from its focus list plus it is the one industry jim says is booming. actually i watched you do this on "mad" last night on defense regardless of what happens with the fed or the economy we'll tell you what it was oh, i guess i wasn't supposed to tell everybody what it is. >> you just gave it away >> sorry about that. >> it's friday we'll try to salvage what we can of this week jim, we'll watch expiration. you had the china five-year prime rate get cut uk sales, decent >> our economy is stronger than china's. >> for the first time since '76. >> yeah, that's a remarkable thing. we're in an interesting moment i know "the wall street journal" had a piece yesterday which was very telling, which is that there's a lot of cross currents, but china's weaker, russia may have overstated. it could be america's time and i think that maybe some of the dollars now, maybe part of the strength in dollars is a

recognition that everybody else is doing terribly. so i don't know, i mean, i know it's hard to be bullish on stock, but the country itself is a place you would think people would want to invest because our -- we're doing it. we have democracy. >> to the point you're making, the dollar is an important thing to put up there. it is sucking capital out of china. in the past they've had to defend the currency. spending an enormous amount of their reserves to a certain extent, in 2015. they want to avoid that scenario >> yes remember that, august of 2015. >> yes this is a very good story in "the journal," giving you the history, almost $1 trillion to arrest the slide in their currency >> they have a $17 trillion economy. i think what's happening, david, even though we don't see anything good in our stock

market, globally we are attracting money >> where is it going >> it's going into bonds take a look at -- remember, the ten-year, i went home one night and my wife said, you look so unhappy. i said, the ten-year she said, someone didn't get tenure no, the ten-year, the bond >> i'm thinking back, it was late last month when bofa said go long ten year target 2 1/4. you said that might be extreme >> that was extreme. i just think things got a little too crazed i do feel yesterday -- this week, i'm doing work with the great larry williams, a great market technician, the advanced decline is up while the averages are down, historically what

could be the beginning of what could be a very powerful move. i think that's not talked about enough on air, that the market underneath, the underpinnings of the market was positive. >> you're talking about a powerful bear market rally >> yes, powerful bear market rally. >> which you would be looking to sell >> yes, i would. market has 75-day cycles i know this stuff sounds -- david, you might think it's fans fanciful >> how should we be taking these bear market rallies? there's a belief that until you know what the fed is going to do, you can't see the end here we seem to be accustomed to whatever turbulence in the market resolves itself in a short amount of time that's not happening this time >> jay powell has to be get off this 50 thing.

50 is a fantastic tuscan wine. i'll get you a bottle. >> i appreciate it >> you have to reposition. you have to go to lockheed martin one of the things -- leaders -- i don't know if you've been following what's going on in the house. >> the house of representatives. >> yes but the amount of money they want to give ukraine, it won't stop at $40 billion. the thing that's important is we have to rebuild everything we gave them. >> now you're talking about what we teased. >> yes i mean, germany has to -- what's the matter it's going to happen >> i'm not saying it's not going to happen. >> lockheed martin and raytheon are the two. our arsenal, which is a democracy, is vastly depleted. leader mccarthy will push for a lot. >> almost $20 billion of budget

support for ukraine. >> so i just think that's going to be -- you reposition into those stocks right there they're all good, but they're all going to get great >> because we have no choice we have to replenish what we sent over. >> i understand. >> there's 1,500 tags. >> so that's your recommendation >> yes >> rotate into defense because -- >> and also health care. >> and health care >> because those are two areas -- >> -- money being spent. >> if powell does slam on the brakes, which he has to, there's runaway inflation, health care does well. because of the fact that we have to replenish our arsenal, defense does well. all the defense companies merged, there's only a company of them. i'm working on a new thesis. what happens if antitrust decides to go after some of these companies that merged? >> you mean try to break them

up >> yes and not go after tech. >> what would you have in mind >> i'm working on it >> oh, really? >> it's a thesis >> so you have haven't proved your thesis yet. >> you have to first have a thesis >> then evidence rolls in, data. >> yeah. >> can carl and i be the judge -- you know, the panel that you have to present to? >> no, because you always let the facts stand in the way, it drives me crazy. i'm serious. i think that we're in a kind of a crossroads here. >> it's interesting you mention that, because listen, legislation coming out of the house or senate, who knows whether it has a real lifespan that will actually get to the president's desk but the senate bipartisan coming out against google saying you've got to split up the ad business. >> that's ftc. i'm talking about serious

antitrust. >> what do you mean, that's ftc? they're trying to craft a law saying -- >> i'm just saying the focus is going to be on real companies and whether supply chain got hurt because of the lack of competition. >> okay. so you don't want to talk about the idea that the senate is trying to pass a bill that would break up google. >> no, because that would be the greatest thing in the world, google doubled >> the cfo >> i'm sorry, i didn't hear you. >> i think david knows who ruth is >> i didn't hear you >> andrew's got a good interview. >> that's why, i didn't say the name i'm supposed to infer. andrew, yeah, okay >> andrew ross sorkin, the dealbook thing >> i didn't think he was the cfo of google. >> just stay focused so we can do the "a" block here. >> jim, citi today removes

amazon -- >> what is that, do you see what the price target is? >> they cite what they call macro uncertainty. it's weird, it's still a top pick but it's off the focus list >> that was totally befuddling >> you have some thoughts here on amz >> i think amazon has come down to the point -- i've been waiting for amazon to come down to the point where the only thing you're paying for is amazon web services and i think that downgrade marks the bottom for amazon because now we know amazon's problems are the same problems that walmart had, target, not real stores, that's a whole other thing, but that amazon has come down enough that you're no longer paying a premium for what, david, is a pretty darn good business, amazon web services. >> it's a great business, still growing. although having more competition than it had a few years ago from the likes of microsoft >> overall they were

overstaffed. now -- >> not in amazon web services. >> i don't think anyone actually works at amazon web services >> it's got incredible margins the advertising business has strong margins that slowed a bit as well. >> the retail business, the tech is probably better than some of these others and thisey will tae action, they will let people go. i think amazon has bottomed. >> so down 30% over a month is enough to get you interested >> it's more than that it's that people felt they had lost this great -- that they had this great retail business and maybe everybody has gone back to brick and mortar when you saw brick and mortar was worse than them, remember, the fabled comments by brian cornell about what people wanted, what were the two things people bought? >> luggage and sunscreen >> what did my ollie's army

pitch? they had a coupon for sunscreen. >> it's important to put on sunscreen. a few hours go by, you apply again. >> david, i'm saying, they must have an algo that's a limited group of things that the public wants. go back to amazon for a second i am saying i thought the problems were with amazon and it turns out april was a horrible month, march was just okay the problems are not with amazon >> all right >> it's with the buyer here, we should mark it down to whatever the price is today >> yesterday, june 7th, 1039 >> 1036. >> i think that jasi has had enough, i think jasi is done, i think jasi is going to go into overdrive. i think jasi for a moment there was focused on some other things jasi's focused on money.

>> did you see bezos' tweet the other day, investors want them to stay focused on north american retail. >> i think now that we know that all the other retailers are doing horribly it's time to circle back to amazon. >> it's interesting, i mentioned this yesterday, i do wonder, a giant hedge fund like code 2 which has owned many of these faang names in the past, had incredible performance in 2020 >> yes >> they are running 14% net exposure, 23% growth they have 80% in cash. >> 80% in cash and i'm paying 20% for that >> you are, but how much selling has taken place in high growth names that have gotten absolutely crushed we always talk about risk off but how much of that has occurred now amongst obviously only one asset class here. >> another survey this week said

the individuals have all fled these. i mean, if the hedge funds have fled them and individuals have fled them, carl, that's what looks like a good moment to buy. >> because no more marginal buyers >> i don't think so. i don't know what the people are doing at robinhood, buying shares in, i don't know, pga tournaments. like robinhood is now like draf draftkings actually i like draftkings more than robinhood >> bofa suggests 3,600 is the new bull case that you need to apply not a 19 multiple but a 14 multiple >> no. >> on a longer term picture of inflation, if you lose the trade benefit, things that ken griffin was saying yesterday >> jay powell moves aggressively and the chinese get off this ridiculous policy which they don't think is ridiculous, they have this board of scientists who apparently say it's right, but if jay powell, if the worst thing that's happened in this

market is jay powell said, you know what -- >> not going to do 75. >> that's it he lost the leverage >> those are twoif's that are unlikely to change do you think china is going to change their zero covid policy they didn't sell a car in shanghai, not a single car somebody's i think that president xi for life, eh. big election coming up in november it might actually be like the pennsylvania senate, republican senate election. >> he clearly thinks there's some benefit to being so strict about preventing covid >> he's wrong. he's a luddite >> of course you would know better than he >> stalin's scientists, mendel, you can't sell nothing, you

can't. in the largest state, you can't sell nothing not that i'm speaking to him directly i don't think he's tuned in to our show but the policy must change >> the president is in south korea today. he toured the samsung plant, talked about bringing some of those jobs here. but he did say that history is going to be written in the indo-pacific i'm sure you agree with that >> i do. i think that -- i don't understand how the south koreans get such favored nation autos to us if he's so pro union. i mean, the president has a lot of work to do in terms of trying to make -- i just wish he would spend all his time in california but i think he may be prolong shoreman, union, the stevedores, they're killing us they're killing us it's like "on the waterfront" out there. it's like lee j. cobb. nobody's working >> they're not working >> no. >> chuck robbins yesterday indicated he's concerned about port backups in l.a. again if in fact the chinese do follow your advice and open things up again. >> no, that interview with chuck

was basically, listen, we got to -- everything's too hot, we've just got to slow things down, we've got to get rid of inflation by crushing inflation. we can do it because the american consumer is more flush. and because it's easy to get a job. a lot of these retailers are talking about the stimulus being over it's very illuminating the ross stores was an out of body, horrible call. it was horrible. >> okay. >> but they said one of the reasons people aren't buying things is -- >> ukraine >> i get that when gary freeman says it. >> we're spending a lot of money on ukraine and not on covid -- covid relief -- >> ross stores is like, it's not like $500 furniture. >> no, but bed bath, home, is a quarter of their revenue which you've been talking about a while ago. >> it was a horrible call.

there was absolutely nothing that was positive about the ross stores call. nothing. >> it's being described as a very somber call >> it was. >> it was somber it was ano ode to how we don't know what we're doing. versus the call from palo alto the ransomware, i know the general said there's been a cessation out of russia. it's hotter than it's ever been. >> we'll get to palo alto. we'll get to amat and deare and dash >> wow >> a lot to talk about this morning. a little bit of green on the reba wee ck in a moment ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna.

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elon musk striking back against the sexual harassment allegations in response to a report from "insider" which says spacex paid a quarter million dollars in 2018 to settle a sexual harassment complaint claim. no lawsuit was ever filed. but in a series of tweets musk called the accusations utterly untrue adding, quote, the attacks against me should be viewed through a political lens, this is their standard despicable playbook, but nothing will deter me. we have reached out to spacex

for comment but have not heard back >> i thought that was amazing. >> it's now been supplanted by ru roku >> i'm waiting for burning man >> spacex, by the way, last i looked, i think it's been reported, $125 billion valuation based on the last -- they were creating some liquidity for existing employees, 70 bucks a share is where -- i mean, it's not a public company but that's up 25% from the last round in this market environment, by the way, most private investments are coming down dramatically spacex is going this way in part because of what seems to be early success of that service. >> did you guys see -- >> why >> what was the last ipo >> spacex is sending rockets all over the place >> star link potentially has a real opportunity to deliver broadband service.

look what they did in ukraine. >> he's in brazil right now talking about access, internet access >> i think you need to rethink your thesis on this, jim >> i think the valuation is out of whack with what the current market is saying >> not testesla, i'm talking abt spacex >> i'm saying space stocks don't get that kind of premium did you see what musk wants to call when there's something -- >> yes >> elongate. >> elongate. >> is that funny >> kind of >> he said if there's ever a scandal about me, call it elongate >> i get it. funny. >> i thought it was too. >> he's a real joker, that elon. >> i think he is >> we'll get cramer's mad dash to the final opening bell of the week don't go away.

futures green on this friday but still looks to be seven straight weeks lower for the s&p. just to give you a sense as to how rare that is, since the end of world war ii, we've done that 'vgothopin wee t e eng bell in five minutes facebook's products harm children, stoke division and weaken our democracy. teens blame instagram for increases in the rate of anxiety and depression. it's not great when your customers are voting with their feet

and deciding to kind of walk away. facebook's parent company meta dropping more than 26% last week... that is more than $230 billion in market share value. when will there be accountability? how many more people need to be harmed before mark zuckerberg listens?

counting down to the opening bell squeeze in a mad dash, carl mentioned a lot of the names we haven't gotten to including deare. >> looking down on earnings, the forecast happens to be quite good, though i was looking at news items by john ellis, a newsletter i love in the morning we're on the brink of famine around the world 250 million people facing

famine, maybe another billion that are going to be very hard to feed. a lot of this is 13% that are locked into ukraine, they can't get it out, it's going to start rotting. >> ukraine, the bread basket of europe and unfortunately a lot of countries already always on that line will go over it >> right, and the russians are targeting the farm equipment >> and preventing exports. >> and won't let you get the food out >> that's the humanitarian crisis in the making now we come back to deare. >> deare is going to be down big. the net income is up 17%, earnings per share 20%, it's not a bad quarter. the thing i would just point out is that, why would you sell this

stock knowing that we're on the brink of famine and you need to have tremendous ramp-up in ag? agco bigger in europe, there are very big tariffs on deare. >> let's get the opening bell here the cnbc real time exchange, the big board, celebrating a recent listing at the nasdaq, a spac focused on an acquisition in sustainable energy it's been a week of retail blowups but between deck, foot locker, and vf, there are some things to like >> we had one of these things, better than deare, these were etfs, david. i was expecting quite a bad number from foot locker and obviously we did not get it. decker's, a lot of shorts in the name, people thought that was going to blow up, no these were obviously way out of

whack. foot locker yields 5%. they did the number. people hate nike, by the way and yesterday, sarah had an excellent interview with kevin klein. kevin's not going to be take this lying down. but nike's multiple is still high but i do think foot locker should influence nike a little more nike, obviously they're not selling any cars in shanghai, they're not selling nikes either >> foot locker comps were negative but not by as much. they guide to the high end >> in light of what's happened this week, then they're buying the chinese stocks again which i'm finding so painful, money going right back into chinese stocks, as if nothing's happened and china's fine >> they may see an opportunity

these stocks are all down sharply. >> true. >> and not just from the slowdown in the chinese economy and the inability of people to go out or even perhaps participate online, i guess, and be sure they're going to get deliveries but from the changing rules in terms of technology companies which they are now easing to a certain extent, that also pressured this group throughout the last 12 months >> i guess so. i think so many of our viewers have lost money in china, it's incumbent on us to point out these rallies tend to last three days >> it's down 61% over the last year >> suboptimal. >> it is >> just be careful reposition out of those, third day. the chinese only have so much firepower. >> you had an interesting call on amazon, thinking that it's bottomed there is a question, though, about margins. and obviously we saw what happened with target, inflation,

fuel costs, transportation, wage pressures, ebitda down 20%, we saw what happened with amazon, fuel cost issues, wages, oversupply of workers. but what about on the margin side i mean, have the pe's adjusted for the expectations that margins are going to be under pressure, jim? >> great question. i guess i'm thinking about that you have this amazon web services business which we all know is really powerful. the actual multiple is still way too high for amazon. but amazon web services is one of the fastest growing businesses on earth. and we now know the retail business was -- they didn't lose share. and they have to lay off a lot of people. who knows what the actual numbe is they have way too many people. amazon, like meta, facebook, these places are all coming to realize, we were hiring and hiring and we've hit the wall. and if they've hit the wall and

they're good business people, then i think a guy like jasi says all right, we're done, we're done spending all this money, we're going to go back and be more rational by the way, shipped, the target thing, we use shipped all the time for "mad money. they say, i need a diet coke, let's get that from shipped. these places have to start charging a little more because people are abusing the heck out of them. they are you know what, i need some ritz crackers, let's ship that over honestly, they've got to stop it i don't think people realize how much this price war is costing these companies. they need peace. they have got to stop it >> for things like that you've got the private company go puff, that's their business. >> doordash. i'm just saying, what they left out of all these conference calls was the absurdity how much

people are abusing their same days >> we haven't mentioned the buyback at doordash, $400 million to offset dilution from rsus, an interesting turn on strategy for some of these names. >> tony is an honorable fellow, trying to figure out exactly how to keep people with doordash there was a grubhub fiasco this week which i don't know if you saw the grubhub -- everybody switched to grubhub because grubhub had this -- >> promotion, right? >> promotion every restaurant was hurt by it. everybody was hurt by it but tony is showing great honor there. what a terrible stock. airbnb, a terrible stock >> the company is doing okay, more than a billion in stock >> global revpar is doing well but may is showing topping action, which may have huge

implication for hotels and airbnbs. >> if the fed does its 50/50 thing, it's obvious they're long dated assets, and long dated assets are losing value. >> it's interesting on the doordash, just to come back to it, as carl said, of course, done to offset the dilution from rsus they issue their employees which is part of their compensation i brought this up before, we've seen in other periods where there's been a significant downdraft and technology stocks particularly, in the earlier stage, a lot of compensation is made up of stock, and the employees are like, i don't want any more stock, i want cash, which obviously has an impact. >> historically, the earnings are facetious. >> it's adjusted ebitda and they adjust for things of that nature >> but you assume 400. how is it doing? >> not good. >> no. a lot of people in this country, carl, a lot of the younger

people thought the way they could get rich is go to these nasdaq companies and take stock. and they're not rich they're looking for other jobs >> it depends on the window. if you hit it right, you got rich if you joined in 2019 or '20 and got out in '21, you're all right. >> needham has done some work on netflix. i think you would have had to have joined before '18 to be in the green now. >> take cash don't take stock >> even for our own parent company. >> i took stock. >> how are you feeling about that >> fine. >> held 40 pretty well this week >> it's actually down less than the s&p, only down 15.8% >> i'm not here to talk about how much i bought, i bought a lot. i got approval >> when it comes due, do you

sell it because it's part of compensation or do you hold on to it? >> i went in the open market and bought it. >> oh, you're really -- wow. you're all in. >> i bought 5,000 shares on the open market. >> no kidding. of comcast >> yes, of comcast >> the one individual name we can own, by the way. >> i'm not flipping it >> anecdotally, we've seen some buying at shop, spotify. we learned today wayfair and coin, even >> the insider buying has been extraordinarily strong the advanced decline has been extraordinarily strong we're in a seasonally great moment yet everybody is gloomy. i made my amazon call, you look at me like i had three heads >> only two heads. >> i did buy stock in comcast. i didn't tell my wife. >> now she knows actually she doesn't know

because she doesn't watch the show >> she's never seen it >> you had palo alto on last night, aurora talked to you about how business is going. take a listen. >> we've seen a tremendous numbers of supply chain attacks, people have gone and hacked pieces of infrastructure, whether it's solarwinds attack or the log4j attack. what happens is those things are being used by tens of thousands of customers out there and that becomes a back door for all cyber attackers to go through those vulnerabilities and park themselves in those infrastructures and over time, laterally across that enterprise and go ahead and shut them down and demand ransom. >> i thought this was really important. this moment is the moment where you say you have a company that has a long conveyor belt of product. they shut it down, until you pay

them, they will not start it up again. they're in charge. they are in charge of your operation. that's what they do. they embed themselves, and you have to pay them off and that's what nikesh is stopping but that is the most frightening and current thing the bad guys are doing, going into your factory through the back door and shutting your assembly line and saying, look, your company's out of business unless you pay >> unless you pay ransom i guess you have to, right >> have to until someone is prosecuted for paying ransom, these companies are just going to continue to pay ransom >> that's quite a -- i mean, is that all off the back of -- >> yes, nikesh would say he's taking share from crowdstrike. i think palo alto is in a very good position.

>> by the way, they had 40%. this was his 16th conference call a lot of people felt he was going to come in and literally just keep buy, buy, buy. he is stooped in the suite of on-premise, off-premise. and his products work fantastically. you're protected across the board. i know someone who got really hacked and they're not getting their money back in a credit card situation and it's very shrewd, what nikesh is saying is, it's everywhere and no one -- and everyone is sworn not to talk about it but it is everywhere and any business that thinks it's an invulnerable is wrong. >> fascinating we talked a lot about this space lately

jim, basically demand has never been better, clear path to $1 trillion a bunch of target price cuts today. >> gary dickerson, who i liove, is saying, the next six months are going to be tough, a la chuck robbins. '23, '24, we're sold out look how miserable this market is they listen and care about the six months but do they even think about the fact that they're sold through >> can you revoke orders in some way, can you cancel orders >> the only places they're hbein hurt on tvs, pcs, and low end phones that's the low pressure. they're not buying tvs in china. inexpensive level. i would buy some of that but the materials call shows the short sightedness of this market because gary dickerson ends it

with a note of hope. >> so do chuck robbins yesterday during our interview with him, talking about the fact that he continues to see real growth in the business, pointing to the backlog as an example of that. >> i thought that chuck told a very good long term story, very bad short term story and you know what, those if's are almost too great to ponder we made the number, we beat the number, we're going to buy back stock, nobody cares, it's like, get me out of this one >> today, all right. >> gary dickerson, that was really on board. such a good story. and no one listened. >> it is at an all-time high today, exxon as jpmorgan last night said, our commodities team is looking at $6 gas, if that happens, that's going to weigh on their inflation outlook. >> stock's up 52% this year,

obviously chevron up dramatically >> i got to do a documentary about what's going on at exxon >> they're benefiting from the rise >> are they happy, i mean, do they know when you talk to them that this is halcyon days for exxon? >> yes, but they're also very measured at exxon, i think, in terms of, okay, oil prices are here right now but two years ago they were here and we have to play over the long term. the real question becomes, given the prodigious amounts of cash flow these businesses are going to be gushing, how do they allocate, and how much more can they really put towards opportunities they see in terms of low carbon solutions in the case of exxon or reducing carbon in the case of chevron, however you want to talk about it, or, you know, it's an opportunity set at this point. and it may be that it's fully funded given the opportunity set. and to your point, what do you do with the excess cash? not putting it back in the ground significantly to increase production over a long period of time so your shareholders want it

back >> they're getting 7, 8, 9%. >> the buybacks and dividends are prodigious >> these are great stocks. on june 23rd, 8:00 p.m., i think that exxon is the story of the year, because it turns out that for 13 million, you get the board of standard oil. >> exxon is an incredible story. we've had incredible access to the company which nobody has ever gotten. we are very excited to share that with everybody. >> have you been to the two plants he has? >> i've been everywhere. i want to guyana i went to corpus christi i've been all over i'm like johnny cash >> there was a time where zoom's market cap was bigger than exxon and today exxon is more than ten times. >> who's zoomin' who eric has done such a great job

and it doesn't matter because i've been using teams, webex, i can't really get on webex, i'm always kicked off of webex >> but exxon is helping out, energy, of course, dow is up 220. we're back to 3935 let's get to bob pisani. >> good morning, guys, happy friday nice open, five to one advancing declining stocks on the s&p 500. we saw the trading range, 3900, 4100, vix is back below 30, that's significant look at the sectors, you guys are talking about energy it's been a consistent market leader that's up today. materials are up we had some news out of china, they're making cuts in their five-year loan prime rate, that's going to help stimulate the chinese economy. the hang seng was up 3%. china is on an upswing tech is holding up pretty well consumer staples up but still lagging on the week. that's been a big story.

it's been a topsy-turvy week big momentum, stuff that's still strong, energy has been the most consistent sector throughout the whole year but china is on a little mini upswing. china was terrible throughout march and april on these lockdowns, the chinese stock market just fell apart it's been coming off the lows in the last two weeks as they're talking about bringing shanghai out of a lockdown. meantime, the exact opposite for everything else. the consumer staples sector was a market leader until a week ago and has just fallen apart. so now the momentum in that is in the other direction reits, another market leader up until two weeks ago, has also fallen apart this is what bear markets look like the stuff that was doing so well, it kept holding up, the consumer staples, reits, everyone thinks, good business still, fell arpart there's two sectors that are left out there one, as the guys have been referencing, energy, not just exxon, but chevron is the best

performing stock in the dow jones industrial average, right now up 44% marathon petroleum, every day a new high conoco, also consistently on the new high list. that's continuing to hold up well the other sector is big pharma most of the big pharma stocks, merck, bristol-myers, johnson & johnson, remember, the sp is almost 20%, so these stocks are comparative stalwarts. i don't have biotech on there, that's not part of this. it's big pharma that's been holding up well. merck consistently hit new highs in the last 52 weeks the bear people keep messaging me, okay, bob, they're going to circulate through the pharma and energy stocks, that's how you know you're going to hit bottom when these two start falling apart. i don't know all i can tell as you those two groups, energy and pharma, continue to hold up well

meantime, tjx and ross stores seem confusing to me you should see what's going on, you see them both down here, but i want to point out the luxury sector zegna, he kept talking about the strong business in china and the u.s. here is what he said god bless america. america is doing tremendous. i don't believe in a recession in america or if there is one, i don't believe that our customers will be hit by the recession lvmh also making very bullish comments about luxury in the u.s. and china here's the problem i have. did you see rischman, they're the competitor, it's down 13%, it trades over in switzerland. what happened, carl, the sales were strong, but the net income was way below expectations they seem to be having the same problems about everybody else, with strong top line colliding with high cost, you see that stock is trading down. that's a new 52-week low for

rischman they own cartier, they're the competitors. lots of confusion out there, again. carl >> bob, well-put, bob pisani, thanks treasuries and the bond report, kind of a light day for macro. we'll get the baker hughes count. inflation around the world in japan for example, core inflation beat the boj target for the first time in seven years. the 10 year back below 2.84.

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we knew some of these april quarters in retail would be key, but look at these historic declines for the week. worst s&p lag guards, target, ross stores, bed bath, the list goes on. that will be the theme of this important week dow is up 162. wow, we're crunching tons of polygons here!

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join over 3 million members and start enjoying rewards like these, and so much more in the xfinity app! and don't miss jurassic world:dominion in theaters june 10th. what is on mad tonight >> tonight is bob blue, from dominion, which has a big lng company. so has to say close. i think nuclear power is coming

back >> not just in europe? >> i think that we should be building small nukes and that it is happening >> apparently we're not going to rely on venezuela according to what she said this morning or yesterday. so looking for other alternatives >> largest repository of oil in the world and they just wrecked it i want everyone to have a great weekend. i'm planting this weekend, so do not bother me. >> i won't >> i know you want to bother me, i'm putting in my tomato plants, so stop it >> i'll leave you alone. >> we'll be looking for pictures >> oh, yeah. >> always in his suit. the man gardens with a tie >> i'm going to do it. i'm going to garden in a suit just for you look, this is an hermes gardening tie. >> we'll see you at 6:00 on "mad money. dow up 140, back in a moment ger left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do.

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good friday morning, welcome to another hour of "squawk on the street." we're live at post 9 of the new york stock exchange. morgan brennan is off. a bit of a bounce, but it has

been a rough seven weeks for the s&p as we look to close out a septem seventh week lower, back to 3933 >> and we're 30 minutes in to the trading session. let's look at three movers we'll start with a company beating on earnings, deere citing on worldwide crop prices and palo alto network shares are going the other direction. they posted better than expected profit and revenue, raised its full year guidance for the third time also a positive feffect on othe players in the cybersecurity area as well and we will end with doordash which announced the authorization of $400 million for a stock buyback program and they are doing that largely to

offset die offsetdilution of a cash payment program. and meantime s&p to the cusp of a bear market dow is on pace for eight negative weeks in a row, haven't done that since 1923 joining us this morning, yourin timer. you have done some great chart work, but a lot depends on what you think earnings will do from here on out. >> yeah, this is really the key distinction, right if this is just a valuation reset because the liquidity environment has gone from super accommodative to now much more restrictive, then you can compare what typically happens to liquidity and what happens to valu valuations and we've done pretty much a full reset the forward p.e. was 23 times earnings next year's earnings about six months ago

about 16.5 right now that to me is right in line with what you would expect from valuation derating based purely on liquidity conditions. but that is not counting the earnings side, fli right price is always at the intersection and so earnings so far have been good i mean, we have a few notable misses of course that we all know about, but generally speaking earnings estimates for 2022 and 2023 are still rising and most sectors will see more upgrades than downgrades so if the earnings side, if the e side holds up and just devalue race of the 6, 7 points of forward p.e., then i'm comfortable at least that we are reaching levels that make sense for the s&p 500. but if the e becomes at ricsk, f the economy really slows and we get a recession and we get an earnings contraction, then of

course price has to do double duty because then the p.e. has already fallen but then the e starts falling and then the price of course has to go down more so so far that is not my base case at all, but that is the risk that we've only kind of taken out one leg of the stool at this point. >> and that is the point that has been made the last few days and that is that equities appear to be rising in a recession more than a lot of macro indicators atlanta fed still at 2% for the quarter. but the number of companies referencing recession in earnings calls is hitting a multiyear high how will you know when that breaks >> we have to look at earnings revisions. i disagree with the notion that the stock market is pricing in a recession. to me the stock market has fully priced in a valuation regime shift from very accommodative to more restrictive but that is all it has done and it has fully reflected that

changing land skdap. b but valuations are now reasonable if they were to overshoot below what i think is fair value which is around 16 times expected earnings, so if he start trading at 13 times earnings, at that time i would say the market is pricing in a recession but i don't see it yet and the ongoing earnings revehicles are the key thing to watch at this point. >> but you did mention the e in terms of the p.e., and i do wonder after a week like this particularly after we saw target and walmart, we saw, you know, significant costs, transport, wage pressures and margins far less than had been anticipated, how much of that is a concern to you when you look at the e and the second half of this year in. >> there is no question that earnings growth is slowing right? it was 40% last year it is right now on a trailing year over year basis, it is 18% growth that is expected to douggo downo

10% for 2022 and maybe there is down side risk to that but earnings estimates are holding in very well all things considered given where inflation and the economy are. so so far i'm not seeing evidence of a significant downgrade. but having said that, earnings growth is slowing at a time where p.e.s have been derated as well. and you look at upgrades versus downgrades, they are running about even right now, which is fairly typical for where we are in the cycle, kind of more towards late cycle but whether we get an actual earnings contraction i think remains very much to be seen so far, you know, trailing earnings at around $208 per share for the s&p 500, expected earnings at around $230 for next year and holding pretty steady. and so that number could actually go down and still be in an earnings expansion but just in a slowing growth rate environment.

and a lot of that i think is reflected in the price >> what do you make of longer term calls that argue that we're entering a period of structural inflation, not deflation, structural war, not peace, structural nationalism and protection allism over globalization, and that in itself all connotes a lower multiple over the long term? >> i think that that is reasonable and it is good to see that the valuation multiples have already reset so quickly because, you know, 25 times earnings is a different ball game than 16 times earnings and so, yes, geopolitical tensions and all the other things you mentioned, certainly inflation has been negatively correlate with p.e. ratios in the past five year is down to about 75 basis points from its peak and i think that that is potentially some light at the end of the

tunnel because if real rates are rising because tips break evens are now falling, then that gets the fed to maybe the finish line of a moderately restrictive policy sooner. and then people are constantly saying that we need the fed to pivot for the market to rally and without that pivot, which doesn't seem to be coming anytime soon, we won't get a bottom but i think that in this market, all we need to see is for the fed to stop moving the goalposts, right because that has been the last six months we think that the fed will go here and then the fed says, no, we'll go there and if the fed just stops doing that and just executes to its plan and brings the feds funds rate to 3% by 2023, and doesn't move the goalposts from there, i think that that could be similar to what would normally be a fed pivot that would then be necessary to sort of to bring up the animal spirits if you will

>> it would be quite a moment. we'll see if we get there. have a good weekend, thanks so much see you soon >> thank you stocks overall may be getting a bit of a boost from china which cut a key benchmark rate of course covid has shut down large parts of the chinese economy. eunice yoon is live in beijing with more. >> reporter: thanks so much. if you want to understand what really motivated the chinese central bank to make that surprise rate cut, just take a look at what is happening behind me which is not a whole lot i am in one of the premier districts, business districts, in beijing and the streets are very quiet the rate cut really has become a sign of just how concerned the chinese leadership is about the impact of the covid lockdowns on growth the five year loan prime rate, which is a reference for home mortgages was reduced to ed to %

t from 4.6%. one year rate was unchanged signaling that it does maintain a targeted approach. but this specific rate cut was targeted in the property sector which has traditionally been a major driver for growth here but more recently, has been under a lot of financial strain because of the unraveling of evergrand as well as other developers now today the premiere met with foreign executives, the premiere has been sounding the alarm on the economy and today he told foreign executives that the government would do whatever it could to try to maintain their operations now, the reality on the ground though is something else so for example, the district where i'm at now has only had a handful of cases at the same time, public transport is still suspended we can't get taxis here. no ride hailing apps and so this is kind of the

complaint that i'm getting over and over from business executives that it is just really difficult to do business here it is hard to schedule meetings. it is difficult for them to have meetings with their staff. in fact a lot of them say that large portion of their staff are in lockdown or they are in lockdown themselves. so in theory the government is opening things up, they said in coming days things will get better and better, but the reality is that it is just very, very slow growing. and i think that that is one of the big concerns here, that because people are projecting that the outlook is grim, they are not spending as much money, they are not -- they are worried about their incomes so people are saving rather than spending. >> such a great rundown to sort of understand what is going on you mentioned opening things up a bit but not really why has the government held the line so firmly here given that they are clearly concerned about

the impact on the economy and yet unwilling to perhaps take the steps to truly allow the economy to really fully reopen there is obviously a consensus somehow that they are better off still with the zero covid policy i guess. >> reporter: there is a consensus in the part of the government that is following xi jinping. he has not attached himself to this zero covid strategy and for a long time the chinese government has been touting this covid policy as one that has been very successful for china in fact in many ways over the past year or so, they have been mocking the west saying, look what is happening in the u.s., it is such a mess there. so many people have died here we keep people safe, we protect lives. so that is the narrative that has been going on here from the very top however, what has been interesting is that we have been seeing the premiere coming out and much more vocal about the

economic impact. and he is somebody who has -- that job, the premiere job, is usually the person who is in charge of the economy, but he himself has been a bit marginalized with president xi and so what is interesting is that he is becoming so much more vocal. and people are starting to wonder if the premiere is trying to use the disgruntled voices about the zero covid policy to try to push back against president xi and the possibility that he could be getting a third term towards the end of the year >> that is a fascinating political backdrop that we'll be watching all year, certainly all summer your mthank you for your reporting. and the rest of the hour, we'll have a closer look at deere. the stock continues to sin sinkn the latest earnings report

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record high gas prices continue to hit consumers. california remains the most expensive state topping 6 bucks

a gallon jeff curry is joining us now we always look at gas prices, overall and also talk natural gas, but i do wonder, any forecast at all for demand destruction given that price i just quoted? >> no evidence whatsoever of it occurring yet. and i think one of the key points, people are worried about a recession. china is in a recession with all the lockdowns which is creating a lot of slack in the system so i could point out you are at $112 a barrel relate now with china still under lockdowns. what happens when china comes out of lockdowns and takes that stock out of the system. there is a lot of up side going into the second half of the year >> you gave me good questions. so what happens when china actually reopens and gets its economy fully functioning again? >> let's go over the fundamental story that creates that up side. and i do want to tone down or tame some of the bullishness because the geopolitical picture

has softened somewhat. so the fundamental story is you do the china one foot on the break, the other one on the accelerator, which means as soon as they take their foot out of the brink, acceleration will be significant. at its peak, global oil demand contracted by 2.5% based on the lockdowns in china and it is down probably about 1% to 1.5% right now, which means as they take their foot off that break, demand will pop at the same time, you have a seasonal increase of 3 to 4 million barrels a day. so a lot of momentum in oil demand on a global basis, at the same time u.s. and the west go on holiday which exacerbates the situation. and with russia, questions about the tariffs, but overall impact on oil supply will continue to deteriorate. so our up side is $125 on crude as we go into the summer months. what are the geopolitical overtones that have kind of

dampened the bullishness one is that the u.s. government is talking about tariffs tariffs as opposed to sanctions. it punishes russia in terms of losing that extra revenue, but it doesn't create the misaa allocation of barrels on a global market. so i think people are going hey, the situation out of russia is not nearly as bullish as if you get tariffs. the other factor is relation s ships between theu.s. and key oil producers are fine right now. so those factors could take out some of the bullishness. so i kind of want to temper how bullish i was last time i was speaking to you, but the situation, you know, at this point, substantial up side going into the summer. >> and on that last point, venezuela and a lot was written about the white house potentially blinking regarding saudi arabia how material could those relationships be

>> yeah, venezuela will require a lot of capital so even if you open it up tomorrow, the level of destruction to those production facilities, i mean like the upgraders have been stripped for the copper you will have to spend billions to get that production up. saudi arabia however, you know, take it is a very different environment. all we've heard is that biden is willing to speak with the crown prince, you know, but it is showing that, you know, that that relationship is thawing that could be significant. i don't want to make any prognostications about what could happen there but it is going in a more positive direction >> finally, i know that you have some insight on europe as well, would love to get your sense there as they try to wean themselves from russian oil and

gas, in particular gas in terms of the electricity needs of some of those countries what are your expectations in terms of their ability to diversify supply there >> gas, you cannot do it western europe, central europe, was developed around cheap pipe gas coming from russia there is -- lng is not a substitute take the manufacturing process in germany and move them to the gas fields elsewhere in the world and ship the bmws, don't ship the gas the gas is too expensive you listen to any manufacturer in germany, they will reiterate that point that it is always cheaper to ship the manufactured goods than to ship the gas so lng is not a substitute they will have to figure out which other type of arrangement. with the oil, it can be done it would be difficult, but i think the key point with oel is, you know, right now what is

being put on the table tariffs as opposed to sanctions. we'll see if we go that direction, but that would be a much less destructive outcome which is why some people have taken a more bearish position. and on the demand destruction, europe is the area that will see demand destruction, not the u.s. >> and why is that >> because demand destruction is not a price dynamic, it is a quantity dynamic i mean, you don't have enough supply to meet all the different economic activities. the supply losses in europe are bigger than what you see in -- u.s. is pretty much long most of this stuff so the real shortages will materialize in europe. and you are not pricing up some low priced consumer somewhere in the world like india it is the person who sets the price is the last person standing that is still willing to buy it, and that is likely to be somebody sitting in europe. >> got it. jeff, always appreciate it, thank you. >> great thanks for having me shares of deere continue to

sink seema mody has more on the quarter which was a little confusing. >> and that is what executives discussed on the call. blaming the miss on sales on supply chain issues which are constraining the company's ability to sell more agricultural equipment that is impacting inventories on hand. pricing was up across all its pricing categories, yet margins still contracted, executives saying higher raw material costs and freight costs will continue to put pressure on margins and higher fertilizer prices are constraining farmers, north america is still deer owe's lars market, but rising interest rates will likely impact home sales and home improvement spending but they expect saz i asia to b moderately and the impairment charge was

expected yet deere reaffirmed its sales guidance suggesting the second half of this year will be very strong j mm hourmorgan analyst saying w believe the stock will be met with skepticism. and so that is what we're seeing with shares down nearly 9%, on pace for its worst day since march 18 of 2020 street remains relatively positive with a price target on average of $445 per share. and the stock has vastly outperformed its peers on the bet that hire ad prices will accelerate demand for tractors and combines, but the results that we're seeing today underscore the challenges that it continues to see on the supply chain front, yet its investor day is nextthursday where deere is expected to unveil new technology for its ag business again, bullish on the second quarter. they expect q4 to be the highest

revenue quarter of the year. >> fascinating land values up for farmers and we'll see how much of that translates to deere sales. and as we go to break, ross stores getting crushed today after missing on both the top and bottom lines and inflation pressures have been made worse by the war in ukraine. seems like every day we get a 20% down stock and today it is ross a lot more straight ahead. dow gains almost gone.

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kathy wood's arc atf crown jewel tesla losing its top spot. it had been number one by value, but data shows that is no longer the case stepping into the top spot is roku with $13.2 billion in market value fund currently holds 17 million. and arkk has been scaling down

its tesla holdings over the past year i like when we get a nice transparent view of what they do but also interesting to watch arkk hold up on a relative basis for the last week. >> yeah, and yesterday in particular, very strong day. obviously vastly underperformed the s&p over any meaningful time frame of late. but, yeah, inflows continue apparently as well and speaking of elon 34musk, ish striking back against sexual harassment investigations which says that spacex paid to settle a claim against musk no lawsuit was ever filed. mu musk saying it is untrue and adding the attacks against me should be viewed through a political lens, this is their despicable playbook but nothing will deter me from fighting for a good future and your right to

free speech. we have reached out to spacex but we have not heard back and a look at the markets as we were up about 260 on the dow at thehighs, now up about 4 #. it is expiration day, so look for some activity as we go into the close later on this afternoon. 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.

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facebook's products harm children, stoke division and weaken our democracy. teens blame instagram for increases in the rate of anxiety and depression. it's not great when your customers are voting with their feet and deciding to kind of walk away. facebook's parent company meta dropping more than 26% last week... that is more than $230 billion in market share value. when will there be accountability? how many more people need to be harmed before mark zuckerberg listens? here is your cnbc news update at this hour. on the first stop of his asian tour in south korea, president biden visited a samsung

semiconductor chip factory that is similar to a plant the company is building in texas >> so much of the future of the world is going to be written here in the indo-pacific over the next several decades we're standing at an inflection point in history where the decisions we make today will have far-reaching impacts on the world we leave to our children tomorrow so this is the moment in my view to invest in one another, to deepen our business ties, to bring our people even closer together >> just two days after finland formally handed in its application to join nato, russia is cutting off natural gas supplies to that country citing finland's refusal to pay in russian rubles and despite any hand ships, a small finnish brewery is celebrating the country's bid with a new beer with nato's symbol on its blue can

the finnish expression means i'll have a beer i'll take one, david back over to you >> i'll have a beer. all right. always early but always 5:00 somewhere. >> it is friday, right >> it is friday. minneapolis fed president kashkari suggesting that the fed may have to be even more aggressive in trying to combat inflation. and steve liesman has more for us steve. >> yeah, good morning. minneapolis fed president has been among the more dovish fed officials, now increasing hauhaub i hawkish. he is suggesting that they will need to weaken consumer spending he told reuters that are these stronger balance sheets leading people to spend more or be more confident to just change their behavior, their spending patterns and is that more sustainable, in which case the

fed maybe has to be even more aggressive more aggressive rate hikes along with a plan to rapidly reduce the balance sheet has uncertain economic consequences. and kashkari said he could not guarantee a soft landing for the economy from these rate hikes. he said, quote, we know we have to get inflation down. we are doing everything we can to achieve a soft landing but i'll be honest with you, i don't know the odds of us pulling that off. okay so fed futures markets have not embraced that tougher talk just yet. still priced for an additional 100 basis points of tightening by august, another by the end of the year, leading to a top price right now of 310 about a year from now so still a lot of work to do esther george telling me that she thinks the fed for now should stick with 50 basis point rate hikes and that she held out some hope consumer spending could ease in coming months limiting inflation in how far the fed has to hike. but there is a case for 4% funds rate or hire if the fed needs to

raise rates above neutral to really slow the economy. carl, with that, have a great weekend. >> thanks, steve let's bring in rbc capital amy sullivan and megan chu sounds like that you are looking for self disinflationary prints before you believe that the fed is done. >> yeah, i mean, i think that the problem here is that the catalyst that the market will need is going to be reassurance that not only is inflation peaking, and actually we're fairly confident that inflation has peaked, but that it is coming down at a fast enough pace to really relieve pressure on the consumer who are already seeing wages start to roll over. so if consumer prices do not come down quite as fast as wages are coming down, then consumers are in a situation where they are faced with negative real

wages. and so if we look at the bloomberg estimate for the end of the year, the fourth quarter average for the cpi is 5.9%. that is still very high. and so i think that we'll need to see reassurance that our base case for closer to 4.5% is coming to fruition to see the fed start to pair back and i just think that that will take some time and we're likely to see normalization of the federal funds rate until then. >> amy, one head scratcher last couple of weeks has been the seeming disconnect between equities and the vix one broad theory is that institutional sellers don't fee down side protection what do you think is going on? >> yeah,interesting to see thi disconnect especially in the context of call it 4 to 6 weeks ago when we saw pretty dramatic volatility out of the rates market i would say two things are happening. one is look when the markets are down a lot, there is kind of less the hedge

and second, i think a lot of people are on the sidelines. i think a lot of people have derisked and degrossed but i will say one thing, we feel the volatility viscerally even if it doesn't kind of perform to the same standard that you are seeing for the market and i do think that persistence is important because though we saw higher volatility during the pandemic, it hasn't lasted for this long. >> megan, well done being in the office on a friday i think that is you in the office there so is that impressive right there. you know, i know that you believe that when we get signs of a panic, that will be the time to lean into equities and i'm curious as to what the signs will be. >> we have seen a decent correction obviously in the market at this point and we've really been grappling with is this a growth scare or the prelude to a recession and at this point we do think this is just a growth scare.

so that would suggest that we're just about there in terms of the historical pullback that you see in those scenarios of 15%, 20% if it is a recession, it might be 25% to 30%. so even then, we are still getting close to adequately pricing in a recession but if we're looking at valuations, we're at 15 1/2 times earnings on the s&p 500, but we haven't really seen earnings estimates come down aggressively i'd like to see that happen. i'd like to see some of the option hedging pick up a little bit. puts versus calls. and even the vix, you know, we spend to see those spike when we get that flush out and an indication that we found a bottom and it doesn't feel like we're quite there yet. so we're still patient, we still have elevated cash we won't try to exactly and precisely time the bottom of the market but we tend to see a little bet more stress at those bottoms >> finally, amy, we did mention this morning that it is a big expiration day your thoughts about how that is driving price action and where

big round numbers on the s&p for example fit on days like this. >> yeah, it is interesting, auctions expiration has become more and more important as we see volumes in options rising. for today people are really focused on that 4,000 line where i think about 90,000 contracts between puts and calls are going to expire. and then, you know, depending on where we end up during the day, dealers have short covering do around collapsing their hedges, then, you know, you could see a moderate rally but look, what i would say is a lot of these things are really short lived. they happen in and around the days following expiration, but ultimately it doesn't destroy the higher themes that are going on in terms of rising rates and the kind of aggressiveness of the fed. but those are the things that we're watching in terms of expiration >> guys, appreciate it and a good weekend to you both whether you are in the office or not. >> thank you

i want to see amy pick up that guitar in the back there. as we head to break, check out the biggest laggards on the s&p for the week dominated by of course retail names. we had walmart earnings and target earnings both of which were sorely disappointing on the earnings side, not as much on the revenue side lemons. lemons. lemons. the world is so full of lemons. when you become an expedia member, you can instantly start saving on your travels. so you can go and see all those lemons, for less.

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bitcoin down more than 20% since the start of may kate rooney is tracking the price action for us. >> bitcoin back under $30,000 this morning and investor sentiment is still pretty sour there could be a silver lining though, market tourists are selling out, that might be the shakeout that the crypto needs to fund a bottom they looked at some of the behavior of longer holders, the

least likely to sell in a dow downturn it appears to be there top buyers removing considerable selling pressure from crypto markets. there was the unraveling of a major stable coin that shook investors. those are supposed to be trading at $1, but a big one lost its peg. and if you strip that out, ust, there has still been about $8 billion in redemptions of those coins. analysts pointing to that showing that traders are really cashing out of the crypto ecosystem all together hoping for seller exhaustion and investor sentiment they are hoping has hit a bottom. one sign of that, grayscale bitcoin trust suggesting that investors don't feel comfortable holding it in their brokerage accounts and a little less hope when it comes to an etf approval and analysts are looking for a realized price meant to reflect

bitcoin's overall cost basis and that is around $24,000 bitcoin got within about 9% of that last week it was seen as a key support level and amid all the uncertainty, bitcoin also regaining its dominance, seen as a relative safe haven in crypto. and that smaller investors and retail investors have been selling out of some of the more speculative securities back into bitcoin. back to you. >> a lot going on your beat this week thank you. we'll have a lot more on the space coming up in the next hour on tech check. plus a closer look at citi and why they removed amazon as one of their top picks, shares down about 30%. ats l mi uatheopth ialcongp t t of the hour. leveraging gold, a strategic and sustainable asset... the path is gilded with the potential for rich returns.

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boeing shares under pressure after the successful launch of the s"starliner" spacecraft it is under development for nasa's commercial crew program competing against elon musk's spacex it came after months of delays and 2 1/2 years after the company's first attempt. morgan brennan talked with the

former nasa administrator about "starliner" and the outlook for private space. let's get a check on the markets before we take a quick break for you. we're almost back to flat on the s&p. you can see it right there, nasdaq barely holding barely hol as the dow goes negative at this hour we are back after this to adapt in the changing world, you could hire a professor of theoretical mathematics. we all know this equation, right? he'd crunched numbers day and night. that's it. to maximize profitability. morning. i have quarterly numbers that are beautiful. and forecast revenue from every corner of your organization. is that important? or you could use workday. the finance hr and planning system that helps cfos make better decisions faster.

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in a single, easy-to-use software. visit paycom.com and schedule a demo today. wealthy individuals are pouring money into collectibles, art, wine, and cars, as a mental against inflation. we have the story. this is a tale of two markets. you have stocks falling yet selectors spending over $2.5 billion at the sotheby's, kristy's auctions over the last two weeks. it started with the andy warhol portrait of marilyn monroe setting an all-time record for

american artwork sothebys wrapping up at $922 million for the macro collection, the most expensive single collection ever sold. you want to talk about investment returns, phillips selling a bosstiot my favorite was the sugar shack, a 1976 painting by ernie barnes. it was a marvin gaye album cover and was featured in the closing credits of "good times". news breaking that a 1955 mercedes was sold for $143 million. that is by far the most expensive car ever sold, and more than twice the previous record even dinosaurs are having a comeback, at least as investments right now. a fossilized skeleton resembling the velociraptor that was on

jurassic park went for $12 million, more than twice its estimate history shows art prices rise during inflationary periods. rising 100% between 1977 and 1982 but the art market is i will liquid and opaque. it has cycles. for now, pushing higher. >> some of those prices are truly extraordinary. you mentioned dinosaurs, did they have a period in the past when they were a strong investment as well and then fell off? >> not really. this is a recent phenomenon. there was a t rex that sold a couple years ago for four or five times the estimate. that started the new craze for bind sore bones. i guess a lot of hedge fund guys like to put these giant dinosaur skeletons in their homes, because they have big enough homes. that kicked off a new craze. it's really just in the fast few years. at all levels, the top and the

bottom, all kinds of art, all kinds of sculpture, cars, wine, jewelry, it is all booming because the wealthy do see it as an inflation hedge. >> yeah. robert, i always love your -- you know, the reporting you do hedge fund guys with giant dinosaur skulls in their living rooms. we have got to get a picture of that as well i can imagine it, of course. i probably know some of them. >> times we live in. >> yes thank you. >> oh, mice dinosaur skull cnbc out with a new edition of its delivery letter. leslie pickering, who also knows guys with dinosaur skulls in their living rooms talked to brook field and has highlights for us. >> i didn't ask him about his dinosaur skulls if he has any in his living room but bruce flat to be the ceo of brookfield building it into the second largest alternatives firm in the

world behind blockstone. with investments that span real estate, private equity, infrastructure and credit, he is not too concerned about the macro head winds that are out there. >> if we have a recession, it's going to be a light recession. and that's a good thing. and -- but there is no doubt -- look, we need to get inflation down around the world. it's either going to come down naturally over time or the central banks are going to cause it to come down. those two scenarios paint differently. but they will be successful. we will get through all of this, as we always do, and we will come out the other side. what's important for us is that inflation is very impactful in a positive way for real assets >> brookfield is also pop pg up in asset lie areas like technology the firm wrote a check to outth from it is private venture arm

to help elon musk to buy twitter. i asked why? we are building a growth business technology has always been really important it has been growing in importance in the investment world. what didn't make sense in a lot of cases to us before in our mainline business was valuation. and today valuations are getting much more reasonable so i think it's going to, in all of our businesses be much more important in the future because valuations are real. this specific situation -- that specific situation you referred to, which i won't comment on the transaction, but we have had a long relationship with a number of investments with tesla and elon and therefore, just -- it emanated out of that. >> what do you think are his motivations surrounding the deal what are you hoping to achieve from it given all the noise, all the hairiness? >> i think think -- i won't make any more comments on it from there. our relationship is with him and we are supportive.

but, look, our growth team think it's a good business >> you can watch the full interview or subscribe to our newsletter at delivering alpha.com or click on the qr code on your screen right there. david. >> he's always good the hear from, leslie by the way, where were you that was a beautiful view. >> we were in the hudson yards area, one of their new properties over there on the roof top got lucky with the weather as well it was a gorgeous view. >> thank you for bringing that to us, leslie picker. i wanted to end before we hands it off to "techcheck." look at tesla shares there is looseness in the industry down some 36.8% over the course of this year you can see, though, full-year performance not nearly as bad.

only 13% -- actually, still up but significant fall in those shares of course, you have got to go the math to answer the question as to whether musk is still the world's wealthiest man or whether bezos is back with that title. that will do it for us on "squawk on the street. "techcheck" starts now good friday morning, william welcome to "techcheck," i'm carl quintanilla with diedra bosa jon is off delivering the commencement address at his alma mater. >> today we are bargain hunting for tech names, the small and mid cap names to target. what to watch within software. what's up with apple the stock having its worst month since 2020 some bull and bear case. later, a big beat and then a surge for palo alto networks why cloud and cybersecurity stocks may be too kmeep to