you saw mortgage applications fall again today the last piece of that market that needs to fall is home prices that happens with a lag, but that's a big ingredient to show us that inflation has gotten to its highest level and is coming down >> all right thank you. we'll check back good to have you on this morning. >> bye see you tomorrow good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber coming up, a couple days of combines and that near 1% rally on tuesday, but futures are weak as the 10-year yield stays elevated, oil at $120, and the tenth straight day of record high average gas prices at $4.97. mortgage demand falling, continued inflation headwinds and some signs the economy could be headed for another quarter of negative growth.

plus a covid boost, vaccine development sharing shares of novavax and moderna higher we'll cover that and zelenskyy's message to corporate america. the president of ukraine is set to answer questions at the yale ceo summit this hour carl >> we'll monitor that. we begin with the markets and fearings of a recession. jim, yesterday it was the world bank today it's the oe c d cutting their global growth outlook for the u.s., around the world, and nearly doubling their forecasts for inflation. >> well, look, how can you not d cut growth we have conflict nations in europe that are slowing, china not really opening we are gripped by what's happened with target i don't know about the inflation side of it a lot is related to oil. we have a glut of retail making it so that everybody is involved with the promotional activity. any v anything promotional is really good for the consumer

we see mortgage rates going up enough that maybe we'll get a glut of housing. and those things are deflationary i think that the one remaining part is oil. oil is very geopolitical and plus the president refused to go and say what can you do for us and whack we do for you, because that would mean concessions to fossil fuels. the president won't do that. he'd rather go to saudi arabia and try to get them to pump. you go to texas and that kind of foolishness is hurting the american consumer. >> we come back to this every day, jim it's interesting to me i think it is worthy of a bit of a conversation you know, yeah, there is certainly a desire on the part of this administration to try to attack climate change in a real way. i know you believe that it's a rel threat and not missing that in any way you know as well as i do that it takes time even if you were to -- i'm not quite sure what, government leases? i'm not quite sure what you're

looking for in terms of him saying pump more and then saying yes when their shareholder bases as well seem somewhat uncertain as to whether that's what they want they would much rather have the money returned to them in the form of a dividend or share buyback. i'm curious what you think that conversation is going to be. >> sure. look, i think that the -- ever since the president has been talking about going to saudi arabia, also solar, that doesn't help cars. he's said there's got to be more oversight on pipelines well, i mean, you can't have it both ways. you can't say more oversight for pipelines and at the same time say more pipelines so hehe's withholding pipelines no real credits being give fn you're trying to do carbon capture. david, you have an important documentary june 22nd with

exxon. i think they're a changed beast. if i were the president, say, you know what, i think exxon is trying to break bread with us, i have to break bread with them. but no, the president doesn't want to do that because that would mean his green constituency, not like the one in germany that ended up i think putting us in the situation we're in, the green constituency is too powerful. i think what he doesn't realize, biden has not realized is those people are not going to help republicans ever what's the point sit down with daren woods, say, listen, i know if you start now it will take a year, but we have to get this thing down in the sense that we know at least a year from now there's going to be more oil. go through 12 million or 14 million barrels wnd we know that oil will stop eventually because there's a curve, david >> i understand, and you can talk about it a year ahead, but it's going to obviously impact prices a lot i get that >> right so thank you >> i do think exxon is a changed

company and people can judge for themselves >> yes >> they can judge for themselves two weeks from tonight, june 22nd, 8:00 p.m., because we have access to the company nobody's ever had you can judge for yourself whether you think it's a changed company and if it's serious about attacking its own carbon footprint as well as that of the world, so to speak at the same time, you need a price on carbon, need it to go up significantly, absolutely right. i come back to the shareholders because i believe that is also an impediment to tough decisionmaking on the part of many companies in terms of saying we're going to put a lot more money back into the ground. >> i know the kinds of things i've been coming up with, but how about if a government gives you money, it goes right to your shareholders and you pump more neither side is going to do that i've been trying to work on things i keep coming back to credits for carbon capture, making so that you spend money, you don't get hurt i think the government is more likely to go windfall tax on the

refiners, which is not what you want, the big price is a lot of the price at the pump is because of the shortage of refinery. i'm not asking for keystone. it would have brought heavy crude ideal for our refineries, but all i want to see is some discussion -- you agree with this -- better to go to u.s. producers than to saudi producers hat in hand. which one is better to go to >> carl, in my opinion, for whatever it's worth, it's better to have the conversation regardless always have dialogue i think that perhaps some would say that has been a blind spot of this current administration, their unwillingness to talk to certain parts of the business community. in my opinion, you can talk to them in every way. they're an important component of what's going on in this country. carl, back to you, the bigger issues, which is inflation, which is being driven to a certain extent by these gasoline prices that we're all dealing

with every day i drove to new jersey today. i thought about it wow, this is going to cost me more than it normally does. >> $4.97 on a national average is another record. as we said, we have a dozen states with averages above $5 a gallon, guys, jpmorgan looking for $6.20 a gallon as an average by august. jim, all this is going to feed into cpi because although we're getting encouraging metrics on, say, prices of chip, prices of shipping containers, price of fertilizer, bofa, we look for another hot report in may when we get consumer price index on friday, headlines spiking maybe 0.8 month on month energy is going to offset a lot of the constructive things we're seeing >> true. we have to understand if you have mortgage application downs and we know a lot of people who locked into a low rate two months ago are now not able to get that rate, you can't go in now. if you want a five-year treasury

bill, 3% yield to maturity we're beginning to see a lot of things that tells me that you must predict that housing is going to go down i think this target news should reverberate and be just as big as gasoline, because what's going on bought at a store is much cheaper don't forget, we now have work from home. it is true i talked to lyft yesterday more blue-collar workers are riding because they still have to go to the office. but the cars do get better gas mileage and we have these industries like the manheim index of used cars, carl they are down dramatically in price. i think, yes, we have a number friday that is backward looking. the forward-looking numbers are going to be much better with the exception of gasoline. we can asterisk gasoline, but we can't asterisk what happened to target target was an incredible move. we had ollie's bargain, not a big story, david is not a member of that army, but a lot of people played with it pause of

the target inventory they have a problem with inventory. there's all this inventory we should be thinking about that as a win for the consumer. it's not all a loss. so i think in the end, carl, it will be a push that's better than what we had and inventory in stores and promotional environment, that is fantastic for back to school and that's what we'll have >> interesting kind of split decision on target in terms of the analyst reaction bofa cuts to neutral, 235 down to 165, david, but jesjpm, idiosyncratic. the wallet shift we've been talk about for almost a year. >> we saw that with initial numbers in terms of what people are willing to spend and want to spend money on we continue to come back to the amount of savings that is still available to consumers it is diminishing, jim, but it is still not an insignificant sum that many believe will continue to power demand

it just will be different demand >> think about what we buy you move into a new house. you want to make the house different. well, everything in these aisles going down it's the hard goods that were really the bane of target's existence. those will all go down you want to buy a tv, it will go down i would say the cost of a tv is equal to at least a month if not two of how much you're paying more at the pump i think the journalists are endlessly talking about price at the pump because it's so easy to see. there are a lot of other things that can come down i think airline prices can come down those are just sky-high. i am urging people to say that if you think that the only thing that matters for inflation is gasoline or oil prices you're dead wrong there's a lot of different inpunts. used cars are coming down radically, and cars and trucks matter >> it's a good point and the share of the consumer spend on energy has come down

over the years a bit of a spike here lately obviously over the past couple decades not nearly what we used to spend this morning the yale ceo summit is taking place at the new york public primary a surprise special guest addressing the event, ukrainian president zelenskyy. several ceos and business leaders attending the summit streaming on cnbc.com. sara eisen is there. we'll hear from her after that session ends a pretty good lineup, jim. ibm, jane frazier, citi, pfizer, liberty. be a good sense as to how business leaders from around the world are viewing exactly what we're talking about today. >> absolutely. jeffrey sonnenfeld -- that is just a fantastic conference. it's kind of i would say a festival of business and jeff keeps it at a high level, obviously getting zelenskyy is terrific. like to hear what people have to

say about all these issues i think everyone is afraid of slowing or seeing slowing except for cybersecurity. i've had those people out here today, a bunch of them at the cybersecurity conference carl, there is no letup and there's no hope i think, if you don't have a cybersecurity specialist everybody else, i mean, look, we have to speak to chuck robbins today and see if anything good has happened since he was on our show last. i don't know the down beat nature of everyone could create a recession just the talking of it i don't want that. i don't want that to happen. >> that's what chuck robbins said at davos a couple weeks ago. >> yeah. we can talk ourselves into recession. i was out with a bunch of young people and all they want to know is what month. it's like they have a betting pool let's go to draftkings and see if jason robbins can't give us a when the recession starts. maybe we pick a day. what were you doing in new jersey how did that happen? >> you're in san francisco and i

got -- >> did you cross the hutchinson? >> yes, of course. putting finishing touches on the documentary, still work being done >> when is that? >> by definition, when you go out with people, they're going to be younger. i want to make that clear. >> absolutely. but younger people worried about recession and what day >> they weren't -- you push through them and then you actually get rates higher and you normalize things how many year the fed wouldn't take all costs to keep us from having -- >> servicenow, huge company. we'll ask frank today on snowflake, but huge company, saying please, understand, this is not 2008. there are forms of recession -- >> correct >> -- that are not so destructive that we have systemic risk. >> yes >> that's something that i think we have to deal with david, when this june 22nd documentary is coming on, what i'm going to talk about is the president meeting with theranos.

>> are we arranging that >> if sara can sit down with zelenskyy, anything can happen i work on putin every day. he likes "mad money" more than he likes your show >> i'm not interested in that one. >> no? >> no. >> musk. right here in new jersey >> all right well, musk is tweeting around the clock. >> we'll talk about musk's new fascination with youtube, get to novavax, intel, affirm, dock you sign, and vix close to 24 stl. ckn montil lemons, lemons, lemons. look how nice they are. the moment you become an expedia member, you can instantly start saving on your travels. so you can go and see all those, lovely, lemony,

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we feel that we are rewarding them as we progress as we advance, which is why we put aside half of free cash flow of dividends and the other half they let us keep >> that's broadcom with jim last night on "mad money" on the road ahead following the chipmakers' deal to require vmware what a transition story, jim, that company has been. >> yeah, and there we have to understand that they have multiple product lines the only one they see any weakness in is telco, and that's because it's consumer. they're seeing tremendous demand from all of the hyperscale

companies, something like the meadows. they have no letup because this is just booming. they think vmware is fantastic and it will be accretive hock tan has put together a monster. i asked him directly, i mentioned you by name. i thought you might like that. >> thank you >> you're quite welcome. he said there are so many targets for him to buy that are accretive, tell david not to worry about it, basically. >> i appreciate that by the way, it was a great get and a great interview, jim >> thank you >> it is important to hear from him and we don't the last time all three of us had him on set at the nyc and that's quite a few years ago by the way, we should point out, and it's highly unlikely, but there is still a go shop on vmware, remember, jim, that it was interesting they included that because it was a strategic deal, obviously, not an lbo where we're accustomed to seeing those go shots still worth mentioning you never know it is still a slight possibility. >> it's just a great move for

hock because that puts him at 50% software he wants to be more software it has higher margins. this will drive the stock up if people want to buy a stock that is basically a hedge on tech coming back, 15 times earnings, almost 3% yield, a deal that can be merely cleared that closes, run by a person who basically said, listen, i won't tolerate anything other than profitability from anyone. this is not one of those price-to-sale stories. this is a fantastic semiconductor story. a lot of people feel he slashed and burned he takes out a lot of cost and it works >> listen, and that's why the stock has done what it has and why he's able to deal and generally get a pretty good response in his own stock price, which obviously is important give b they are using that as part of the currency for the vmware deal itself, jim. when he says there's plenty of things to do, it doesn't have to be a giant deal, obviously you can do smaller ones. they add up as well. he just feels like there's still

plenty out there >> vmware is going to take time to digest. it's a big deal. carl, when poor people get too bloommy, broadcom is a $230 billion company where product touches every aspect of digitization and business is nothing short of on fire so it is very easy to get down, particularly after the target boom remember, there are companies that are returning capital like the oil companies are doing but returning capital, growing, and you can find them. gigantic buyback from this man who has outperformed the market dramatically in the last ten years. i don't want people to give up hope i want them to be more opportunistic. broadcom is down today lit open down and probably go down, but it's all s&p and traders. there's nothing wrong. i have the most up-to-date look at that company, and if anything, business is stronger than reported. it won't be a good idea to sell it but people want to sell

because they're in a sell mood look for broadcom to be a buy. >> actually a ton of news in semis, taiwan semi, gail sanger making comments at bofa about headwinds. we'll get to all of that and "mad money" and the opening bell your record label is taking off. but so is your sound engineer. 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 ♪ ♪ we all need a rock we can rely on. to be strong. to overcome anything. ♪ ♪ to be... unstoppable. that's why the world's largest companies and over 30 million people rely on prudential's retirement and workplace benefits.

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all right. three minutes before we get started with trading let's squeeze in a "mad money. uber is out where you are. maybe you've picked something up i don't know what's going on? >> yes well, first of all, barclays says the time is right it's at a radical inflection point because drivers are now available. we'd also point out that i'd say you see driverless cars here pretty much everywhere you have to have someone in except for 4:00 a.m. david, i think this is a great call i have to tell you, here's why i think so because this thing has come down so much, and what happened yesterday with lyft, it's very hard to get drivers. but with the so-called recession that's coming, drivers are available and people are going out. people are going out everywhere. i mean, the partying -- they're going out, not as much as in

san francisco but the rest of the country is getting hot i think this is a terrific call and you can start buying uber because their principal cost is going down >> all right >> contrarian call by ross >> that stock has done little but go down as well, jim >> well, it's been -- let's call it an underperformer >> about a $50 billion market value. now, usually you love talking about things like uber freight when you talk about uber >> they're trying to figure out how they can make it so because if you're taking something, say, from texas to minnesota, there's something in the truck minnesota back to texas, and they're doing a good job in the end, it's long haul trucking that is the problem nobody wants to be a long haul trucker. it's tough, tough job even for the money because you're away from family for a long time. you're always trying to find a parking spot a good piece the other day in

the papers david, uber itself, when you have people looking for money and you can make $40 an hour, you can make a lot of money, well, david, uber may be coming and i think that this is the time to start accumulating position >> all right carl, we have a minute before we get started with trading of course plenty of other things we're keeping an eye on this morning. >> indeed. we haven't really got on the a few of the earnings stories today. scott's miracle gro will be down estimate was 7 double-digit decliner. >> very disappointing. very good natural growing product this year. i thought it would help them we know that lowe's and home depot would have a pretty good time but scott's miracle gro is so seasonal, there's about four weekends, and a couple weekends, the weather was bad. i say no i don't want to go there

i don't want to go there or to ollie's bargains >> we'll watch that. let's get the opening bell here guys at the cnbc realtime exchange at the big board, paint maker sherwin-williams, and at the nasdaq, robotics automation company celebrating it's lifting via spac >> still spacs out there good luck if you're a spac that's just raising money now and trying to find a deal. we've gone through those numbers of course. the story of spacs lately as you know has been dealing getting called off and likely what we're going to see is them -- we'll see how many, but many of the spacs at least or certainly a significant number of spacs that went public not being able to actually find a deal but that's still yet to come we'll get into the sweet spot of that probably six months or so from now if you remember just a torrent of issuance that took place but, jim, it was also

reflective, of course, of a speculative moment in our broader market it's 's one we talked about it lot. being here brought me back to it you were over here, i was there, 30 feet apart and we would talk about names like snowflake, and the revenues of that company now when you look at these names, whether it's a snowflake -- we can go through so many of them as you have done on "mad money" oftentimes, down 70%-plus from their highs. here it's only 47% off during one year >> we have frank on tonight from snowflake. frank never understood i think the price of his stock when it was at $405, which was absurd he's a very tough guy, made a lot of money from people before, but the crowd was so excited, david, the tiger globals, the

journal mentioned article, they invested in snowflake on the vc side, on the stock side. i never understood how that model works, david, because aren't you on the one hand pumping a stock up and on the other hand releasing it to the public which could be good for you? it's a lot of work >> the model worked pretty well for any number of these hedge funds that were early investors in many of these companies when they were private, and then of course benefited enormously during that period where they went public. of course these days we barely see any ipos, not a growth company like snowflake at this point. then their position is marked up enormously, jim. so, i mean, it benefits until it doesn't. until you own these things too long and don't sell enough of them, until you own every growth name in the book that was trading at an incredibly high multiple, and by the way, until you invested in a slew from the venture capital side, and that's whether you're tiger or d 1 or

many other hedge funds as well the question we have now that i ask all the time is where are they marking them? again, tiger doesn't share a lot. i think they may be marking fairly aggressively. others perhaps not so much in terms of what are these private companies that many thought would be coming public this year, for example. they can't find a window to do so what are they worth? what kind of values are they -- and are the owners of those taking the appropriate evaluations for their own investors? because they're getting paid on that >> look, there should be someone within the organization saying, look, these are not worth what we paid for. carl, i want to go back to snowflake for a second because that was the most richly valued. it was never --unlike 2000, frank sloo t sloothman never end that price they thought it should be an

aggressive company and you had to figure out the report but, carl, not every one of these ceos said, listen, my stock is worth a fortune he said -- frank said my business is unique i read his book. he told you what to do it was a lot more cerebral and a lot less i'd say unnaturally overvalued >> we had him on "tech check" a couple weeks ago pretty good insight. reacting to the warnings from vc executives to their founders saying a lot of that is overdone, typical classic cycle of getting overexcited about cost discipline and definitely looking to smooth it out the other interesting software story today, jim, is docusign as they expand their global partnership with microsoft this is the first peak above 50-day since early april. >> we have so many stocks going up roku had a couple of little lift zoom has been terrific

cathie wood and david -- what i call woodstocks, is back buying tesla. it's like a festival of overvalued stocks, although i do like tesla because i think it's well run, these companies, the ark innovation companies are making a comeback, david, much to the chagrin of the shorts who thought it was a natural place >> don't overstate it here she's lost more money for investors than she ever made, right? so, i mean -- >> true. >> there's little bit of a bounce there it's not looking so pretty >> no. but there's movement up in some of the -- >> surprised to hear you take a somewhat positive tone on ark. >> the zooms and the -- let's see about teledock is bottoming that would really be the sign -- >> by the way, there was a story on to roku that got the stock

moving >> the bogus takeover story? >> yeah, netflix i mean, come on. >> roku is moving up on that bogus story. >> yeah, it is >> it is >> yeah. the bar got lower today in reporting on m&a, david. that piece was basically just saying employees are talking -- people are talking about it more and more jim, we should probably touch on novavax and moderna. novavax, of course, fda panel, votes to authorize its to covid vaccine. and moderna, pretty good response >> i'm a moderna person. we have to figure out whether -- the booster is said to last only four to five months. people get omicron, that is only four to five months. i'll get the new moderna i'm due in july for the moderna. people should recognize -- and i know this is doctor stuff, there's a 90% immunity for the first four months.

i shouldn't say immunity you don't get it that badly. and then it goes down to 50% but they don't tell you that that's the actual -- they don't tell you that at all still great mystery about how these things work. >> jim, in the same industry, so to speak, but not having to do with covid, you know, this is a very small study but you followed glaxo pretty closely. >> standing ovation for the breast cancer drug we don't talk about it >> breast cancer drug but also a small study of 14 rectal cancer patients that took place at -- >> yes >> tiny study, tiny, i get it, but all the patients that took this drug had remission. all of them. no evidence of tumor whatsoever. this was advanced co-lo reck tar cancer >> no one's been listening

glaxo has been saying this that was pretty good showing for them and the stock moved $1.50 again, that's the ennui for good news carl, if something is really great, nobody really cares the if something is bad, you sell the whole sector. now, that's bear market, but it's too negative. i thought glaxo should be up at 47.08. they've done a lot of good things but a people say it's glaxo, what do they know. >> one of the things that did work today, jim, was campbell soup organic up 9, looking for 5. gross margins up 90 basis points, jim, but interesting and tellingly marketing expense down 7. i wonder if that's going to be an early tell on what we might hear in media in the weeks to come >> it could be mark klaus has done a great job there. he was on the last quarter and said it was going to be the last bad quarter. sure enough, it was. where are they going to spend? they're going to spend more and more, amazon, spend more on google, less and less snap

i mean, that's just the way of the future i don't know what they're going to do with tiktok. i still believe that reels is coming on strong the question is do they cut out tv that's an old-fashioned tv advertiser, carl, and i think they cut auto tv before they cut out the other. >> the other interesting one, jim, was intel presenting at bofa talking about some of these second-half headwinds, kind of an echo, jim, of the comments we've heard lately, elevated inventory levels, softer demand for pc, parts of data enterprise softening up a little bit. >> i'm interviewing pat gelsinger tonight. what a nice guy. >> oh, man i thought you broke bread and it was all good

>> i like pat. but i also like stocks that go higher hey, it's just a predea-- can w understand he's up against amd, up against genset and nvidia those are tough customers. it's very tough to go up against them we'll talk tonight and get a better sense he's got a long-term plan i believe in the short-term plan is very hard >> you've been right on the stock, don't forget that you've been right. >> david, it's about friends, not money. >> okay. not quite sure what that means, yeah. >> no. just kidding i've made some friends out here that -- it's been shockingly nice >> really. >> cybersecurity. >> no kidding. >> yeah. well, it's extortion the actual price for cybersecurity extortion has gone from about $40,000 to $900,000 now. when you get it, you have to pay about $900,000

they try to leak a couple documents on the web so you know they're serious. almost everybody has been hit by it, no one wants to talk about it because it's too embarrassing you should get cloud strike and palo alto if you're worried. cyberark too and yes, okta, which is identity i got all those. and zelenskyy, no, not yet >> all right you'll keep working on that. carl mentioned lowering the bar on m&a reporting hopefully won't do that with "the faber report. i don't have all the answers there are a lot of lbos out there, in process, so to speak, continuing to hear that in that range, calling it anywhere from $2 billion to $8 billion, perhaps sometimes more one key question in this market is the financing markets we know rates have moved up, so therefore the cost of borrowing has moved up you may, in fact, see a larger equity check in some of these deals but that may be okay because the price will be at a

lower level than it prooechgsly had been as well but when you have security, for example, or collateral, so to speak, i'm hearing things are good secured works well unsecured is going to be a little more expensive. brings me to the first name i get questions on that i hadn't done that much reporting on to, kohl's of course we got that three weeks. the clock is ticking they're working with this group to get a deal done at perhaps as high as 60 bucks a share i'm hearing they're getting the financing done, that it is moving along that's from people who are involved in it most of the financing is together a lot of collateral. they own a lot of real estate. whether they get there to a deal, we'll see, but i did sense some optimism there. in part, that may be reflective of the fact that the company was saying we'll give you three weeks to get this together the stock reversed a bit on that again, a big spread there

reflecting concern that, in fact, they won't jim has brought up many times why do you want to buy this thing heading into a recession, loading debt on it but i will tell you picking up some optimism and when it comes to the financing, particularly because it issed a advantaging a lot of collateral, does appear it is something they are at this point i'm told likely able to put together >> i got the same pushback people told me it's a very valuable property. the real estate is interesting the price reflects a lot of the negativity and i'm not on board the kohl's train. tell the world, david, i'm not getting on that train. you don't have to. until we see is press release, we can talk about the risks being undertaken they have more time. another name i get a lot of questions on because thought this would be an lbo zendesk. up today ever so slightly.

they got voted down. they received a bid. the bid was from a large consortium of private equity firms. these kind of club deals always difficult to get together. here's what i've heard this one is looking good people seem to have put their pencil downs and in fact coordinating for private equity firms, big equity check, getting that done to the finish line, not easy so when it comes to this one, not based on the financing markets, based more on the complexity of organizing the deal itself. they still haven't set a meeting date for zendesk we're waiting. i've heard it enough, people who would be aware of what was going on, to give you a sense that this one looks less likely and finally, want to go to ncr had an act visit, things swirling around there in terms of their ability to do something

for shareholders, and that one still working, still moving. financing markets, again, play an important role in whether you can get a deal done. apollo is the name i've been hearing more consistently than any other in terms of potential buyer there. we'll see if they get there. it's weeks away if it happens at all. but there's another update for you on another potential leveraged buyout, carl, and again, the financing markets will play an important role here right now they're still there. they're still open certainly secured plays a lot better than does unsecured you're going to pay more, but maybe you write a bigger equity check, but if you have a lesser overall price to pay because of the markets overall. carl, back to you. >> that is interesting, david. you know, in a similar vein regarding m&a, credit suisse is getting a bit of a bounce, being thrown into the pot of potential what-ifs, but that comes on the heels, david, of their third profit warning of the year and reports that they're now going

to weigh -- the possibility of layoffs as well. >> man, jim, these guys can't ever seem to get it together obviously, it's more than a year now since, well, we remember, since the giant trade that went against them in discovery and viacom but it's just one thing after another for them and to carl's point, they do put out this update, the investment bank advisory revenue has been resilient, but overall transition for credit suisse is what they talk about for the second half of the year given the economic and market environment and their cost initiatives of course that they hope come through very quickly. >> this is a very interesting story. david miller, global head of investment banking, just the other day said -- told everyone we're back, and then they announced these horrible numbers today. so credit suisse, that's at your own peril.

>> one of the questions there is how do you keep your people, how do you keep good people, particularly when they've put a lot of that compensation with the stock. you can go back and see what it's done. not that easy. guys, when it comes to m&a deals, the one we haven't mentioned yet this morning is one of the biggest, the denver broncos, football. >> right >> and the long family or in specific to rob walton, kara walton penner and greg penner as well, but they're buying the denver broncos $4.65 billion is the price we're hearing it ended up at i've been tracking this a bit. there was another bidding group i was aware of that was at $4 billion. these guys were at $4 billion, came up to $4.5 billion, now $4.65 billion, not our number, melanie hobson joining the group. a big number i was told after debt service might generate

more, a new stadium as well. that ain't going to be cheap for sure, jim. then the question becomes what doest mean for thether franchises that are out there and may be sold? you had seattle potentially on the block, houston as well can't hurt when you get a price like that, the largest ever paid at this point. >> yeah. i guess he did go with the panthers, huh? >> yeah. >> well, tepper was going to trade badly. i bet you ted brown would market it at zero that's how he plays it he is a very serious business person i'm sure if we got on the phone he would despise the idea that these guys are carrying a lot of private deals at higher prices he just would never do that. >> right but your point is that he could mark it up based on this >> yeah. >> a lot >> but the panthers, even though, look, the broncos very much improved their team so i think they'll be much more competitive. that does matter when it comes to what they can do with it.

but the panthers have -- a lot of people felt that dave spoke -- too much money in the panthers >> it is carl's team, so we can defer to him on what it means for the broncos. i would think it's good to have somebody worth $40 billion or $50 billion so own your team >> they have a good quarterback. >> being from denver, russell is the prince of the city right now. those sports pages will be on fire next few months as we go to break, guys, time for "the bond report." let's look at treasuries we did get of course above 3 the last couple days yields have been tending to stay a little bit above, 3.02 at the moment, dow opened with a drop lower but shaving those losses of the early session down 95.

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let's get to jim and stop trading. >> watch halliburton we own it for our charitable trust. it's been remarkable barclays bumps the price target. we'll talk about it in our morning meeting, because this is the kind of stock that money will keep pouring into it's not like the old days where we saw these stocks go up and up and up barclays -- we'll talk about it at the morning meeting >> is it way to early to ring the register >> way too early it's anointed here it's a group where the estimates are too low. most stocks have estimates that are too high. a big one tonight. >> snowflates, which is frank

slootman we have todd mckinnon. they had an actual hack, yet business went up, and i'm we're talking about conflicts in europe, we can talk about china. the one thing i keep getting here is, guys, there's going to be a recession, but don't worry about it digitization lives on. i'm worried about it if you don't have new companies, you don't have more digitization, so i'm a little more circumspect. >> jim, good to get you on the ground there you're or eyes and ears. "mad money" 6:00 p.m. eastern time we'll take a break here. the nasdaq's green

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yeah, it's time to blaze our trail. 'cause the new frontier? it ain't rocket science. ♪♪ it's right here. ♪♪ ♪ welcome back to "squawk on the street." rick santelli here live at cme hq our april final read on wholesale inventories, up 2.2% this replaces the 2.1 mid month. this series goes back to 1992

with february's read of 2.8 was the highest ever these are very lofty numbers this should kick in and contribute a bit to gdp, but it gives us some target tie-ins with high inventory, but is it the right inventory? sales for april up 0.7%. consider that in the rear-view mirror, we're up 1.8 we were up much less than last month. we continue, of course, to see the sales numbers lag a bit. that's not a good dynamic. interest rates continue to power higher we are on course at 302 on the ten, our fifth close above 3% since the end of 2018. carl, back to you. rick, thank you very much. good wednesday morning, everybody. welcome to another hour of "squawk on the street. i'm here with leslie picker and david faber live at post 9

morgan brennan is on maternity leave. interesting setup. nasdaq is -- despite that yields continue to -- we have new economic downgrades, some central banks hiking in poland and india. >> a lot of cross-ocrosscurrent, for sure the full fda will now consider whether or not to approve the vaccine from novavax plus credit suisse warnings of a likely second quarter loss due to negative impacts from the russia/ukraine war and other financial conditions their shares, though, currently up about 2%. we'll end with campbell's soup, top earnings, sales also beating forecast, the company raising

its full-year outlook. investors not too impressed, but they seem tore weathering inflation and supply chain challenges pretty recently. the supreme court is in the final weeks of its term. eamon javers has an update. >> markets watching for this decision effectively potential affecting roe versus wade. we're not getting that this is a case involving immigration into the united states, relating to an in manager, whose property extends into the canadian territory, so this decision is not the one that everybody had been anticipating from the court. we do know we're going to get several days' more worth of decision the big decision tend to come in june and july. a case could potentially affect

roe versus wade, but that decision not coming out yet. the oecd slashes its global growth prediction this morning due to, quote, adverse shocks like the ukraine war here with his outlook is the portfolio manager mike nicholas. great to have you. with all caveats about oakmark's strategy and looking for value, i wonder how you characterize this area we're in >> yeah. the majority of our portfolio is comprised of traditional value stocks a numb of the names in our financial holdings are energy holdings, even our industrials would fit this description, but

in a market environment like today, we've also been able to establish some positions in higher quality, faster-growing businesses where stock prices become untethered from long-term business value we have good examples of businesses that fit that mold. our broader definition of value, combined with our very long investment horizon has historically afforded us the ability to uncover opportunities in most every environment, including today. >> right, amazon, you mentioned salesforce pinterest and pulte? what kind of time horizon do you have to think about to be buying pulte? >> we don't underwrite today's profitability and assume it's normal but when a business is trading at such a mid

single-digit multiple of earnings, you don't have to wait too long now, with something like salesforce, where we think it's cheap, trading perhaps half of market value, but is generating slightly lower margins today than we think are certainly capable of, with an investment like that, you might have to wait a bit longer. >> of course, you also believe that co-ceo taylor, and new cfo amy weaver are bringing a culture of financial discipline. tell me what that means and how that translates into something you think is attractive. >> salesforce is a great business we've admired it from the business for quite some time we just needed a better price. it's got 80% gross margins, grows 20% organically and almost

all of that revenue is recurring, but kind of combined with some changes, we decided to give it a fresh look our conclusion was that the renewed focus on profitability and market expansion, combined with the strong underlying business fundamentals, were likely to yield impressive results over the longer time horizon. if you think about salesforce, we believe they have all the ingredients to be a much higher business they very low churn and strong pricing power. i mentioned the five times multiple of revenue, that's about half of what buyers have been paying for fast-growing software companies that multiple could equate to a low double digit if you assume a more margin profile, like an oracle or s.a.p., which we think thee eventually achieve. we think salesforce is a great

opportunity to invest in a dominant business at a discounted situation >> with the prospect of a slowing economy, and certainly many still tacking about a recession, i don't know how these names hold up. it could give you an opportunity to buy more at a lower price how do you think about that, mike >> the stock has already gone down quite a bit from the high 300s to roughly 180 today, so we think some of that is already reflected in the stock price, but we think longer term than could the stock get cheaper? our goals is to assess what we think at the be worth in seven years. if the business grows slower for a year or two, or below trend, that shouldn't have a material impact on our estimate of long-term business value we think today's price is a good one. if it gets cheaper, we'll have to reevaluate it then.

>> about a third of your portfolio is in financials is that a bet that a recession is not too imminent? >> no, it's not. we've own financials for quite some time. we think they trade at very low multiples, they should sell all their assets and pay back their -- in the interim we are seeing rising rates, which could prove to be a benefit, but you're right it's possible we tip into a recession since the inception of oakmark in 1991, we have encountered a lot of scary things. throughout that whole period, the s&p is up some 20-fold, by

focusing on misunderstood or out of favor stocks, oakmark has gone up twice that rate. >> a big picture, from 30,000 feed, everything we've survived has done in an era of cheap money and often extreme stimulus support. if that period is truly over, does your strategy need to change for the long term >> i don't believe this does we have stuck to the same strategy for decades it's worked in our favor we continue to focus on business value and look for the biggest margins of safety. if we do our homework correctly, we should be able to absorb unexpected economic events or fears of recession we'll get more on that on friday mike, a good discussion. thanks for kicking off the hour. >> thanks for having me.

mortgage rates are rising again after a brief decline in may. the housing market is still suffering from a lack of listings our diana olick breaks it down for us mortgage demand fell to the lowest left in 22 years last week it was nearly half of what it was a year ago the average rate on a 30-year fix had fallen back a bit in may, but rose against to 5.4, that's for loans with 20% down just as a comparison, that rate was 3.15% a year ago demand continues to tank, as you would expect, but the biggest pain point seems to be for home b buyers the housing market as clearly taken a sharp term down after the red-hot buying spree spurred by covid prices are still rising, a new report from core logic shows

prices still baining in april, up close to 21% nationally that's because while there's still some new supply and homes are sitting slightly longer, supply is still historically low. large cities and especially florida are seeing the highest prices and demand. we'll get the may data next week, but builder sentiment has been falling steadily. carl >> a lot of housing news to absorb this week as we go to break, take a look at a road map for the rest of the hour, including a lot more in the surge, as the national gas average hits its tenth day of record highs. chinese stocks are having a good day again with the kweb on pace for its third straight day

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welcome back to "squawk on the street." the national average for a gallon of gas topping $5 in over 13 states, a new record. joining us from the rbs global energy conference is head of

commodity strategy, kalima kraft. great to have you here jim yammer and i have been having this conversation a lot what did the current administration to convince oil companies to drill more that results in gas prices coming down, or is that a fallacy that that conversation would bring about real action. >> the problem is right now, i don't think there's much on the supply side that can be done to bring prices down. we had the secretary-general of opec speaking yesterday, he said the world is maxed out when it comes to spare capacity. we may have 2.5 million barrels globally we are facing ever-growing russian disruptions because of sanctions. yes, u.s. production will grow, but it simply cannot fill the gap we're looking at in terms of russia, and it does not solve

the problem of a shortage of rye finery capacity. tell us more about that shortage and what it means in particular with inventories. >> we have not had major refinery built in this country for decades. so we have a million extra barrels coming on the market, but without refineries able to refine, we'll see the prices rise >> helena, one of the other focuses of the conference you were at this week is what global capacitylooks like is there anything that governments can do to boost that at this stage? it's not as simple as turning a switch on and having more capacity how long is the lag time to do something like this? >> i mean, leslie, you're

actually right this is not a light switch situation. one of the points made this morning is we're dealing with years of under-investment in the oil and gas sector so the kind of catch-up that is needed is not going to solve this near-term problem we were already talking about brent prices in the '90s we're talking about one of the world's largest oil and gas exporters that's going to see huge volume disruption because of sanctions, particularly on the oil side >> helima, the other thing we've been talwatching, talking about- what does happen to energy demand if in fact they go back to 60% or 80%. >> that's why you ae's minister said we have nowhere reached the

peak in terms of oil prices. we already had triple-digit prices when communhina was lockg down their major cities, but the easing of restrictions, the concerns is we'll have renewed chinese demand at a moment when supply remains very restrained year question that we started the show with, what can the biden administration do on the supply side? unfortunately, it looks like there's very little that can be done, and we head into the summer with china reopening, prices could move up materially higher. >> man, cash flows will be predigitous for the companies. we're facing alarmingly low inventories heading into the driving season what is alarming about it? and what conceivably could happen as a result >> i mean, again, we want to talk about the pain point for

consumers. we're already talking about $5 a gallon gasoline. i mean, this is the real issue again, even with the release of stockpiles, if you don't have the refinery capacity, if we have this sort of reopening from covid, that is why we're seeing so much pressure on prices for gasoline i would also really highlight diesel, in terms of the inflationary impact, in terms of how important it is for moving goods around on trucks this is a core concerns for the biden administration there's no spr for capacity. helima, thank you. >> thank you for having me. speaking of oil later this mount, in fact, just two weeks ago today, don't miss my documentary, premiering on june 22nd

you can also watch it on youtube and peacock, but that's when it's airing initially. i'm sure no one wants to miss the initial airing. >> we can't wait as we go to break, shares of intel under some pressure after the company's cfo warnings some of the make rho challenges that will impact the company. citi expects the chipmaker to negatively preannounce or miss the previously issued guidance we're back in a moment stay with us

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welcome back keeping an eye on chinese tech names today, taking a look at the etf ticker kweb. investors continue to watch regulatory pressures ease in beijing. the etf now trying for its fifth week of consecutive gains. shares almost 4% higher, the top

holdings heading higher, but the etf is still down off its highs. yale ceo summit is underway in new york city, where president zelenskyy joined to take some questions. our sara eisen is there with highlights it was quite the room there this morning. >> reporter: it was, carl, a rare opportunity for ceos of america's top companies to get the chance to engage and hear directly from president zelenskyy, obviously joining us visa zoom in kyiv, ukraine i got the chance to start off the conversation, and a good friend of cnbc leading this event here at the yale school of management i started the we with president zelenskyy by asking him what they can do today to help him and his country. here's how he responded. >> companies that are represented in the russian market should leave if that is

possible, for them to leave russia completely. the most important thing is they do not only leave russia, but do not pay taxes to the russian financial system because that funds the war machine that's killing ukrainians >> every day we do get news of companies -- microsoft announcing its scaling back the operations significantly the conversation then moved to the war, where this man is leading his country's fight. a lot of executives were curious as to what comes next. so i asked him about it. given what you know about the russian people, russia, president putin, what will it take for them to negotiate or curtail their aggression

>> we need a powerful ukraine to do that. a powerful ukraine is not ukraine as a state that fights against russia alone, which is situating its troops powerful ukraine is united with the european union, but every country of the european union, not just on paper. >> reporter: there were many ceos in the room, executives, mayors, lloyd blankfein was there. he asked president zelenskyy, pushed further on this idea of the end game what happens next? and how we avoid a prolonged bloody stalemate >> the world is capable of doing it we have just discussed only one aspect when businesses are leaving

russia, and there are many different aspects to it. sanctions policies, they are being introduced already, but we need to switch russia off the global financial, to see the real result of sanctions, we cannot settle for piecemeal actions to just a little pate to circumstance come vent them. >> one final point that i thought was a power of statement. he said we're willing to put an end to it, but not at the price of our independence, and got his third or fourth standing ovation there. jane frazier is there, the ceo of citigroup she asked about the agriculture situation. ukraine feeds the world. tons of those grains are held up, with russia blocking the

port of odesa. >> can you talk a bit about the harvest and the grain and the food situation you are one of the great exporters to the world what can we be doing to help support your people and the economy in the meantime through the next few months on that dimension? >> thanks, jane, for the question to date, probably one of the most challenging tasks that we are facing than besetting our economy and our exporters, this is just the surface of the problem, the top of the iceberg. if we do not resolve this issue now, it will be not just an influx of problems, but a tsunami. >> jane fraser asking about the grain situation, one of the

powerful comments he made there is up zelenskyy accused russia of food genocide and a question -- president zelenskyy said he urges business and companies to help our people financially, as long as they are outside of ukraine, and when they return, he will take care of them. he talked about the rebuild and the tremendous efforts that the country has in front of them back to you guys. >> sara, remarkable. and that's a continuation of your interesting conversation with glfraser in davos about fod

problems the dow is down 132. we'll be bk aomt.acin men 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.

i'm contessa brewer. here is your update. a man drove a car into a crowd on a popular shopping street in western berlin today the driver has been detained as investigators try to figure out if he acted intentionally. approximately 90 larry nassar assault victims, including simone biles and ally raisman, are suing the fbi the defer broncos are get a

new owner. they have an agreement to buy the attempt from the trust in a deal reportedly worth $4.65 billion. that would be a record for an american sports franchise. denver broncos, carl >> we are excited in denver. a lot of things happening. thank you, contessa brewer. some moderate shots. nasdaq did go green even amid some higher yields today let's bring in art cashin to talk more about it, i guess what you're calling resistance in the

4175 area. >> this is a market taking its own pulse, temperature, carl it's a bit indecisive. you have mild seasonal patterns, looking for a possible short-term low, probably friday, maybe as early as thursday so viewers can follow the pattern on the down side of the support is yesterday's low in the s&p, which is 4080 immediately thereunder, 4050, which is very critical it's got to really hold there, and conversely, as they move up, as you said, 4175, and if we punch through there, there's more resistance at 4200. in each kcase, traders will loo to see if the algorithms kick in will these levels work as triggers, or instead short covering so it's going to be critical that's what we're looking at the

next couple days. >> how are you thinking about, art, i guess it's lack of conviction on both sides bears are thinking about earnings growth risks, and economic growth risks. the bulls are hoping for peak inflation, and peak fed. are you directionally one way or another at this moment >> i'm still concerned about the earnings call. i think you are already seeing the analysts beginning to mark down some of the earnings. i think you're going to get maybe not target-like surprises, but i think as we get to the end of this month, and the beginning of next month, you will see companies change their guidance and move it a bit lower. so i think that's a concern of mine i do agree that in some cases you may see peak inflation target is a good example

they're over12stocked in any of torrie when you have too much inventory, you have a sale, which means lower prices than intended, so you'll get some relief, but still not getting the supply lines cleaned down, the ships of still waiting in port, as you guys have said again and again today, for example, the cost of diesel fuel is going up. so even if we get those things into port to get them transported, to target or wherever else they're going to sell them, what we are going to see is higher prices in transports so inflation will be a fact here for a couple months. >> you bring up a good point, art, with peak inflation, we think of it almost like a mountain, but based on what you're saying, we could be in for maybe a high level of inflation, maybe lower than what we have seen in recent months, but still very, very high by

historical standards for a while to come. is that right? >> i think that will be it it will be sticky inflation. the infamous word "transitory" we thought it would peak out, but because of freeing up supply chains it would come down. it may prove to be stickier than that, and i think that's what some of the markets are concerned about. so stock traders will keep an eye on that yield on the ten-year it's tolerable where it is if it begins to move higher, you know, up past 305, something like that, you'll see pressure on some of the high tech so you have some give-and-take here that includes inflation. >> do you think corporations are prepared for inflation we did see the guidance from target, taking some pretty severe actions, but are other

corporations thinking more in the transitory camp of some short-term pain, but things will get better and we'll hang on for the ride. >> they're shifting out of the transitory thing, but here's the problem. supposing you're running walmart or target, okay, you made a mistake, you're worried about the logjam of moving goods in, so you double ordered, okay? maybe if i can't get it from some supplier, all of a sudden both deliver, now much to have inventory of that type now you're going to have a sale, mark that down, but you've got some big times coming up here it is only the middle of june, but if you're in that business, you're thinking about halloween and christmas. you've got to start to build other kinds of inventories they had mickey drexler on "squawk box" this morning, and he said you have to plan ahead and buy some of this stuff you'll have inventory problems for a while to come, i'm afraid.

>> art, finally, i wonder what you're making of small caps at this time. rus rus russell, i've seen people trying to make a line between maybe a lower oil curve on the back end. i don't know you got inany theories >> no. i think weav've been in love wi the high techs for two years, are beginning to understand as difficult as it is for small businesses in america, they do have, in some ways, greater flexibility. when target puts an order in, it's enormous. if you run a smaller-size company, you get more flexibility, i can pare back and give it three weeks, see what happens. maybe that's not the love affair, but the new fondness for the russell and the small caps.

>> a lot to come our way we're still on watch for cpi friday i hope to talk with you in a few days see you soon. >> thank you see you then. as we head to break, shares of spotify are up almost 5% with up upbeat commentary. the company is having a shareholder day. also talking about a 28.5% gross margin, making significant progress on the long-term goal podcasts, where they're spending a lot of money, holding that gross margin back. he does say he believes podcasts have a 40% to 50% gross product potential. we'll be right back. go, go, go. sorry. nope. okay. fresh donuts - hot coffee! they deliver real time data and business forecasts when you need it.

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hasbro notching a victory

after a proxy fight. at the annual meeting this morning, the company said all 13 of directors have been reelected by shoulders also there was a nominated director -- alta fox had been pushing hasbro to push off duncans and dragons into a separate company also say it plans to remain an engaged shareholder. hasbro is the latest management to prevail in a proxy fight. kohl's, mcdonald's saul their full slates reelected. there was a proxy fight that was ended at kroger. u.s. foods reached a settlement last month, leading to the ceo stepping down, the company

adding three more new members, and unilever added a director to the board. so these things ebb and flow, but there's a signal they're willing to side with management, guys >> leslie, it was never clear this guy had a chance. he doesn't have much of a track record on hasbro, right? there are some potentially higher-profile things going on we'll see if they surface and if we get any settlements but it depends it depends on the argument and it depends on the activist, doesn't it >> it does. >> it's not all one side fits all. i think what we've seen with alta fox as a prime example of this, and dave, you know this intimately as well, engine number one was so successful a lot of people were not expecting them to prevail,

because they had a small stake, they had never done an activist fight before, though there were people at the firm that had done plenty of activist fights, but i think a lot of activists have come on to the scene thinking they could replicate the success that engine number one had though there are obviously some very big differences between the situations we have seen this year versus the engine number one, calpers as well the strategy is changing, but so too are the markets. western dig also, but that elliott flash business is good, too. coming up on "techcheck," is now the time to buy netflix? some key metrics show it could be a good time for the long

term check out the top gainers on the s&p. tesla is not far behind.

welcome back to "squawk on the street." i'm dominic chu. industrials right now, as you can see behind me here, among the worst performers on the session so far today the worst performing sector down about 1% it includes many of the transportation and logistics companies like union pacific, expediters international, old dominion among others. the airlines, though, also moving lower as those carriers are trying to balance out the strong summer demand for travel with the higher fuel costs and labor challenges as well it's not all gloomy. caterpillar the best performer up on the day, helped by quarterly dividend by 8% or nine cents a share to $1.20

those shares up 1% on the session so far david, i'll send things back over to you. >> dom, good to see you live as we head to break, cnbc celebrates pride month throughout june. >> my at vice to the community, especially lgbtq youth is to stay true to yourself no matter what your background is. there will always be someone who doesn't agree with you that's okay. don't let labels define you. what defines you is the kind of person you are if you're an ally, be supportive speak up when someone makes a disparaging remark to create change, we must e us our voices and help lift each other up

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i'll take celebrity endorsements -you should buy crypto trust me, i'm an actor - i'm in! (buzzer) -[narrator] investing is not a game so, be careful where you get your advice do your own research at investor.gov before you invest, investor.gov welcome back mortgage demand fell to the lowest level in 22 years last week as interest rates went on the upswing, although sales continued to fall and prices continued to rise. joining us to discuss, dave flipman from builders first source dave, i have to ask you about this because i'm definitely not an economic expert, but usually,

if demand for something falls, prices don't usually rise. so what exactly is going on here there just seems to be a lot of moving pieces in the housing market right now >> good morning, leslie, thanks for having me on i would say i'm not surprised at what we're seeing many terms of the mortgage applications slowing down this industry, as you know, has been white hot for the last 2 1/2 years since the onset of covid. as you also know, a lot of the mortgage demand is driven by refinancing. with rates up 220 to 250 basis points this year, most of the consumers who wanted to refinance, that's already done and rates are higher than where they're at importantly, about 95% of the mortgages are locked in at rates around 3.5, 3.4% i'm not surprised what we're seeing we still have an industry quite strong and healthy evidenced by a number of things i point to. first of all, as i commented

before, the industry is hugely underbuilt since the last downturn we estimate somewhere around 4 million homes. importantly millennials are driving a lot of that demand and that age cohort in the 25 to 34-year-olds are really driving a lot of that demand during the depths of the last downturn, there were about 23 mill one of them next year, projected to be around 29 million of them. while the industry may experience a pause over the short term, first of all, i think that's healthy because we haven't been able to keep up for the last couple years. importantly we think those demographic trends over the long haul are going to win out. >> have you seen any change with the cancellation rate given what mortgages are doing, or do you think people are still moving full speed ahead in building new homes? >> importantly, the homes under construction right now have never been higher. last month was about 80,000 in the country. importantly about 70% of those are already sold, and the other 30% are only not sold because the supply chain hasn't been

able to keep up and the builders are hesitant to do that, but to your specific question, we have not seen a significant increase in cancellation rates. those are averaging somewhere in the mid to upper single digits which is right at the historical average. >> dave, you mentioned the supply chain what are we seeing right now we keep waiting for things to get better, and we keep waiting and waiting. where are they right now >> right as i said, we've been in this spot for 2 1/2 years, roughly. we've seen incremental improvement on important aspects of home building like lumber, like windows and doors over the last three months, but still that fundamental demand has not softened, and it's difficult for the supply chain to keep up. in fact, if housing starts were at the same level as last year in 2021, with that underbuild that's happened over the last decade or sorks we think it would take more than ten years to catch up on that deficit. that's why things remain so strong the supply chain is just not capable of keeping up with the

current demand weactually would welcome a little bit of a pause here in the market and give us a chance to catch up on the 800,000 homes under construction that we just can't get finished >> the critical piece of the supply chain, of course, is labor. are you able to find enough labor to service the homes you're building? >> not really. we hear that every day from our customers. you might have seen that the labor shortages, the construction labor shortages have never been higher in april, about 450,000 open jobs in our industry that's why what we do at builders firstsource is so important. we help take a lot of that construction demand off-site through our pre manufactured components and off-site millwork capability because every day our customers are struggling to get that labor at the job site so we're helping them take that labor off the job site and make it a little simpler for them to complete their construction. >> fascinating labor just increasingly a large challenge for a lot of companies. dave, thank you so much.

>> absolutely. thank you. leslie, a bit of a mixed picture in the markets the s&p is negative to the tune of almost .5%. the nasdaq flat. facebook, for example, perhaps a name that will be mentioned on "techcheck" because we're done on "squawk on the street." "techcheck" starts now good wednesday morning welcome to "techcheck. i'm carl quintanilla with deirdre bosa and jon fortt today, is netflix finally cheap? we'll break it down and discuss whether the stock is a buy at these levels is roku a real acquisition target more on why that may or may not make sense for the streamer. remember when china was called uninvest i believe you might be surprised the look at the performance versus u.s. we'll start with a look at valuations and where to find opportunity in a down market dom