use. futures down 181 the nasdaq, down 113 s&p, down 30 or so 37 million followers on twitter, that guy be nice if he'd retweet -- we're just trying to help this tequila. not going to kill him to retweet it join us tomorrow "squawk on the street" is coming up next. ♪ good thursday morning, with welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange premarkets lower on a wave of disappointing corporate results from several financials, tesla, at&t, and then some weak eco-data, philly fed, worst in nearly three years, continuing claims highest in almost a year and a half our road map begins with that tesla tumble, posting its lowest quarterly gross margin in two years. elon musk says he will continue to put sales growth ahead of

profit at&t's free cash flow fumble shares are falling sharply the company, though, says it is still on track to meet all of its full-year forecasts. and spacex is set to launch its first test flight of the starship rocket system we're going to bring that to you live if and when it happens. let's begin with tesla, though, down sharply in the premarket. these price cuts resulting in the company's lowest quarterly gross margin in about two years. on last night's call, elon musk did highlight that sales growth is still a top priority. >> while we reduce prices considerably in early q1, it's worth noting that our operating margin remains among the best in the industry we're taking a view that pushing for higher volumes and a larger fleet is the right choice here, versus a lower volume and higher margin instead of to ship a large number of cars at a lower margin, and subsequently harvest that margin in the future as we

perfect autonomy this is an extremely important point. >> those operating margins are approaching what legacy oems make >> i'm glad you pointed that out. there's a sense by a lot of analysts that it's now a commodity. that is not what we were thinking what do you give a commodity, eight times earnings, maybe seven? especially if you back out the credit there's an overwhelming sense that he's pivoted, and i have to tell you that jonas is probably the most vocal in this and he's just basically said, okay, look, we would even sell these cars for nothing in order to get the aftermarket and it was a devastating call for the industry for the industry, because you could say, well, wait a second, there are too many evs you could say he's decided to be henry ford david, there's a henry ford aspect to what he said, basically the model t. we're going to make them, we'll go for the aftermarket it's almost like what ge does with aircraft engines.

it was a dispiriting call, because over and over again, he kept talking about how, look, we're going to make as many cars, it really doesn't matter he didn't say gross margin didn't matter. he said, listen, it's not what we're going for. ma we're not going for gross margin, we're going for world dominance. >> and those comments are being echoed by a number of not just analysts but investors as well you already did adam jonas, the analyst at morgan stanley, who we often quote he's very colorful oftentimes. he says, "if our view, there were snippets of the transcript will be remembered for years to come." particularly to the point you just made, "elon musk states the company could sell a car at a loss today in order to capture far lifetime values of the vehicle's recurring revenue. >> somebody said, we know the legacy car companies make a lot of money once you sell the car and once you have a body of

cars, you can really make a loft money, and there was -- it was more of a throwaway comment at the end. i think it was more of a sense that, listen, i could have interpreted this saying, we don't have to make money now we can make it later we can do whatever we want, but i do come back to the idea that there is a commoditization of ev, and now he's part of that. and by the way, i'm not buying a cyber truck at all not only am i not buying it, because i have a truck >> why not he was so excited about it he said it was going to be life-changing. >> it's going to be a lamborghini, it's going to cost too much there's going to be a gigantic battery. i'm calling it a toy for elon fanboys. >> what's interesting in addition to the cyber truck is what others are going to do. here's renault today "if it results in the short-term in slightly lower volume, so be it." >> i think the ford mach-e has

to, but if you have a distin distinguished product, a distinguishable product, like the ford f-150 lightning, i think that you can maintain price. it has to do with demand look, some people, i think, correctly, are saying, the demand's not what it was now, that, david, demand not what it was, i mean, this was the most heavily in demand car in history >> yes >> what do you think of that that's not encouraging >> it may not be and they are facing more competition. i think that's a fair assessment i do wonder, jim, there are a couple of things on the call that you could imagine the tesla bulls, in fact, getting behind the idea that full autonomy is not far away and will be a game changer. >> that's a nice start of the call, yeah >> and their energy biusiness, the battery packs and the like, is growing quickly and also will become a major contributor what are you takes on both of those? >> i think we got to focus on cars one day, we can focus on the

rest let me take a little more positive view on it. let's say he is being henry ford well, who won? henry ford >> that's the point. >> and it is funny that he is up against -- it's not funny. i mean, it's an existential crisis if you're farley, no. farley's got -- their model t is the legacy of them, but farley's shooting on trucks, and i don't know i'm not saying how ugly the cyber truck is, because of course it's hideous. and that's all right i don't mind the ugliest truck i've ever seen that's cool. having owned a ford truck, i can look at that truck and say, you know what? i don't know i think it's something that will be studied in kindergarten for a long time. what did jonas say going to be studied in kindergarten for a long time that's not even a -- no. i'm not going to throw my trees into that truck. that's how i use it. i also clean branches, and i'm making a stream that i will put trout in that's my goal i'm building a trout stream. this thing is a lamborghini.

>> beauty is in the eye of beholder, jim. come on. >> there's no accounting for taste, chief >> there may not be. >> listen to me, i've tested a lamborghini at 200 miles an hour i was not at the wheel, but this looks like a lamborghini i don't want a lamborghini i want a chevy truck i'll take a ford truck, which is what i have. look, someone might like this. it looks like someone that would go on the moon you put it, maybe, in star trooper, what did we say you're not buying my stuff here. >> we think, no. >> 9 :28 >> what ford truck does he have? does he have the maverick? do you have a broncos? what do you got there? the trucks >> why you guys picking on me? >> you got a kennelworth, probably >> because i don't have a truck? >> he's got the kennelworth. peterbilt. >> are you somehow suggesting

that i'm unamerican because i don't drive a truck? >> you don't even have four wheels, let alone 18 this thing is ugly and i love tesla, by the way the black matte is so pretty >> as for the shares, jonas goes to $200, wedbush goes to $215, bernstein reiterates what do you do >> i think, in the end, i think he is great. i think down here, look, the world is still his oyster. he can -- he doesn't need to do this >> he's still got the highest margins, doesn't he? >> yes but to i want to own this? my travel trust owns ford, and i'm standing by jim farley i'm standing by farley, because i think you have to have some noncommodity product, and the f-150 lightning, david, is that product with a much smaller battery than whatever that thing was that looks like, you know, a mars vehicle >> i still want to understand -- >> number one on mars.

no doubt about it. >> you didn't answer me, because maybe you don't know and maybe nobody knows why, as we perfect autonomy, it will be an extremely important point, as he said on the call, laying the groundwork to ship a larger number of cars at laower margins. >> it is true that the machines can drive better than us >> what is it that they're harvesting as a result of autonomy that hasn't yet happened that's the recurring revenue theme here, isn't it >> yes, but look, you can drive them in phoenix and san francisco. there's a lot in the rest of the country. >> it's not creating the taxi, the autonomous taxi fleet. >> you couldn't take autonomous from phoenix to the phoenician let's see you want to see the eagles lose in the super bowl. >> or win. >> they were close >> up -- no one's -- the only other team that's lost when you're up ten in the second half >> the phillies and the eagles both lost. >> one thing i want to stress --

>> hey, they got hurts for 160 guaranteed >> by the way, as a -- i mean, no, you're getting me wrong. that's amazing >> thank you thank you, yeah, first-year playoffs no one ever talks about nick siriani. but i do think -- look when i look at tesla, it is an amazing success, and he can do what he wants. i think we're misinterpreting the long, sometimes boring call. he can do whatever he wants. he's choosing to cut i think that you have to accept the fact that cars aren't as valuable as trucks there's not a lot of margin in cars, and he's not -- he's going for share. does he want to wipe out everybody? does he want to compete with china with the b wrrks d i don't know it was a meandering call it won't be remembered it's not a quarter that will be remembered for years or a quarter that will be remembered for a quarter, because he could turn around and change his view next quarter i think he reveres henry ford,

not ideologically, that i can tell >> meanwhile, as we said, futures are lower this morning after the mixed session yesterday, jim i was watching the number of bank misses today. >> oh, that was a bad day. >> key, discovery, fifth third, i know you've been coming to am ex's defense >> i have. they have to take the reserve higher they have the lowest reserves ever i think there are parts of this am ex that are just -- can i get jay powell to -- i know he's glued to our show. i need him to turn it off for a second i need him to mute it. tell me when he's muted it t&e up 39% airline spend up 60% restaurant up 28%. now, if you're jay powell -- well, jay didn't hear, so we're okay but david, these numbers say, you got to raise rates now you can't even wait. but this is the long on money, short on time thesis and people don't get it. the post-covid, people have

different -- they do different things >> meanwhile, though -- >> what? >> most of our day will be about people talking about the most anticipated recession we've ever had, because that's what they'll with talking about those numbers don't sound recessionary to me >> beoy, dr horton, largest hom builder and a million people have a horton home the numbers were extraordinary i don't see horton indicating -- excellent blowout number, $2.70 versus $1.93 revenue is $7.9 billion. is that recession to have the largest home builder put up those kinds of numbers >> that said, blackstone reported, we'll get to the numbers themselves -- >> the distribution cut? >> we're playing the music they're not going to let me play the sound. that's all right >> we're going to blow out the first break because if you stood with me on this, we would do it. >> i know, but they started the music. i'm not going the get in the way of it. >> you are not my ally >> i am your ally. i wanted to -- i should have gotten to john gray a little

earlier. >> they can cut our mics whenever they want they're in control as much as you like to think you are. >> they think elon musk is in control until this morning >> we'll go to break when we come back, we'll talk at&t shares down sharply in reaction to this quarterly result, the free cash flow miss. we'll get to some of the other results including new corps, las gasas. ck in a moment (vo) businesses nationwide are switching to verizon business internet. (woman) it's a perfect fit for my small business. (vo) verizon has business internet solutions nationwide.

(man) for our not-so-small business too. (vo) get internet that keeps your business ready for anything. from verizon. it's official, america. xfinity mobile is the fastest mobile service. and gives you unmatched savings with the best price for two lines of unlimited. only $30 a line per month. the fastest mobile service and major savings? can't argue with the facts. no wonder xfinity mobile is one of the fastest growing mobile services, now with over 5 million customers and counting. save hundreds a year over t-mobile, at&t and verizon. talk to our switch squad at your local xfinity store today.

shares of at&t are going to be down. looking down as much as 4.5 to 5%, although we'll see how they trade when we open about 15 minutes from now you can see that right there the company did report numbers from their part, and i spoke to the cfo this morning, they said, we grew revenues, ebitda at levels that we haven't seen in a long time. churn was quite low. and they had anticipated a moderation of growth in the industry back to what they call pre-pandemic levels. of course, remember, during the pandemic, there was greater gains. 424,000 post-paid phone met ads, that's 11 straight quarters with more than 400,000 net ads and that children remains quite low. also, fiber, where they continue to overbuild and build out in general, still have their target of 30 million homes. free cash flow number, only a billion. that may be what is concerning

people i did ask the cfo about that few things they cite because they're sticking with their $16 billion free cash flow target for the full year devices. you know, you buy your devices in the third quarter, the fourth quarter, or you're getting those devices as part of the plan that you signed up for. they pay for them in q1. incentive comp is included in q1 and also, capex is front-end loaded, so that, jim, is where they're saying, at least, is the reason why free cash flow is only a billion, although it's still below what analysts were estimating and perhaps it has put into question the minds of some investors whether they can hit that $16 billion free cash flow number. i didn't get as much transparency or detail on directv, which, you know, they still own a majority of. and it does contribute cash to the point of cash flow it's not part of the business. they don't run it, but it does contribute cash, and obviously, that's in secular decline as we

all know at directv. but it was the free cash flow number, i think, that's giving some investors pause this morning. the rest of it, okay of course, when you take a look at the long-term, as we often have done here, you didn't want to own at&t. you didn't want to own verizon you only wanted to own one name, and we put it up, please, the longer term for the three of them, and that would be, of course, t-mobile, which has vastly outperformed -- thank you. >> it's still the same it's just sievert is doing a magnificent job at t-mobile. some people were looking for a $3 billion cash flow >> yes >> now, that's -- to me, i'm putting that in the miss category $3 billion versus $1 billion >> i think that is what the market is keying on. >> how's the dividend doing there? >> it's good the yield is going to be even higher today >> isn't that great? the yield keeps getting higher that's what people want is yield. >> i can see that you're sort of -- you seem to have moderated your negative stance >> i was wrong

i boeinged it. i boeinged it, david >> you boeinged it >> you got me out of boeing when my travel trust was below, and then it moved up i boeinged it. i thought it was bottom. >> so, boeing was my fault >> yeah. >> okay. >> i mean, david calhoun said it was your fault, the ceo. >> i'm sure it was my questioning that got you out of boeing at the low. >> was it? i don't know maybe i'm wrong about that could be could be wrong >> it's happened before. >> let's have a "mad dash" and figure it out. >> we will get more in a moment. take a look at futures here. we'll get to some of the calls as well, including some moves on ge, raytheon, emerson, schwab, back in a minute lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic

i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

spacex, live picture here as they will try again on that starship flight test we're thinking somewhere around 8:28 or 9 :28 east coast time in south texas when that happens. we will take it to you live, talk more about what it means for the future of space flight and business when we come back.

you ok, man? the internet is telling me a million different ways i should be trading. look! what's up my trade dogs? you should be listening to me. you want to be rich like me? you want to trust me on this one. [inaudible] wow! yeah! it's time to take control of your investing education. cut through the noise with best-in-class education resources that match your preferred style of learning.

learn your way. not theirs. td ameritrade. where smart investors get smarter℠.

>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. busy market stood up today, even though the futures are weak several core results to watch, some eco-data. we got claims, philly fed, we'll get existing homes and leading economic indicators later and then a bunch of fed speak, almost half a dozen, in fact in the meantime, elon musk's spacex trying once again to launch starship, the most powerful rocket ever built that first attempt was scrubbed on monday, as you know, and elon musk, morgan brennan, tweeting, even as we speak as we get down to the final few minutes >> we are down to the final few minutes here just about t-minus three

minutes. we are on the verge of history being made if this gets off the ground here. it's a more than just over an hour-long launch window, so anything could happen here it's the first-ever orbital test flight of this mega, mega rocket system this has been years, years of regulatory work and technological tests in the making, and when elon musk talks about colonizing mars, this is the system that spacex has been designing to do that it has also contracted with nasa to land astronauts on the surface of the moon in the coming years, and if and when it does fly here in these coming minutes, it is poised to become the most powerful rocket that has ever flown by an order of magnitude 16.7 million pounds of thrust that is double the 8.8 million pounds of thrust of nasa's sls rocket, which was built by boeing and flew for the first

time last fall, currently the most powerful rocket in operation. it's also the holy grail, carl, built to be fully reusable we've never seen that before no one's ever even attempted it before, and as you look at this launchpad, we are t-minus 1:43 in terms of this system getting off the ground in texas, b boca chica, what spacex calls star base. >> it's one of those moments where tv has trouble giving viewers a real sense of scale. talk about just the physical size of this rocket. we're talking something that's, what, 400 feet tall? >> yes, it's just about 400 feet tall payload capacity of up to 150 metric tons, just to give this a little perspective falcon heavy is about -- or falcon 9 is about 230 feet tall, and falcon heavy, its heavier counterpart, has a payload

capacity of 64 tons. it's massive it's the tallest rocket, and it is standing, as you can see on your screen, it is attached to the tallest ever launch tower as well so, we are getting there, here we're less than 30 seconds until this thing lifts off potentially. >> great set-up, morgan, as we watch some history being made here as you can see, the countdown clock on your screen we'll listen in to boca chica. >> okay, you can see the clock has recycled flight director has called a hold we are recycling for the moment we'll see where they move the clock back to. they can hold at t-minus 40 seconds. they could go to an earlier point. give us a minute to listen into the nets, and we'll see if we can get you more information to share.

>> all right, morgan, some of that clock recycling gives us a little more time to talk about it >> it does >> walk us through some of this process here as the engineers get set for the -- for final preparations >> so, because this is the first ever orbital flight or attempted orbital flight of this system, this is not unusual. you tend to see a much higher bar in terms of actually moving forward with a liftoff, because it's a new system. it's untested. elon musk has said multiple times that there's a very high risk that this doesn't go according to plan and that he will consider it a success as long as this rocket gets off the ground and is far enough away from star base and this launchpad if something happens that it doesn't actually damage the launchpad. so, this is very -- it's a high-risk, high-reward scenario. and as i mentioned, the rocket has been built for reuse abilit,

but you're not going to see that on this test flight. this is meant to see if starship and its super heavy booster can separate from each other as planned and to see if starship can reach the orbital velocities that are going to be necessary before it returns back to earth. >> we'll take a moment here and get the opening bell cnbc realtime exchange at the big board, it's the marcus corporation and the barbara sinatra children's center, marking april as child abuse awareness month. at the nasdaq, chicago atlantic, a cannabis reet. i think the window here is somewhere in the neighborhood of an hour in terms of where they'd have to think about doing it another day. >> it is amazing how often we come back to elon musk as i have said so many times, he is the most consequential man when it comes to business. we begin the broadcast talking about tesla, which is, of

course, an incredibly important company, and then halfway through, we're looking at a historic launch that he, of course, is the center of as well we haven't even talked about twitter, which i actually used to listen to the tesla call yesterday. just went on twitter and listened to the call via twitter. >> you did that? >> yeah, i did it's easy. >> i think you're right. he had a throwaway line at the end of the call, good luck tomorrow with starship yeah good luck with the most important thing that's going to happen in the country today. good luck. by the way, you know, the chinese, an article in "the new york times" about how they have macron, they're starting to line up brazil. we have musk i know he throws china a bone. >> they also would say they have musk >> who do they have? who's their musk oh, yes. >> you won't hear -- you'll hear elon criticize more things he's very outspoken. i don't think i've ever heard him say anything about china >> no one really criticizes china, other than the -- some of the people who we used to think

were dissidents but now we know from chatgpt they're happy >> how about this yellen speech where she says that security worries are more important than economic interests >> there's a call that i got up to listen to, don't even ask why, the taiwan semi call because it goes from like 1:00 to 4:30. it's an insomniac call, and they translate it but the cost -- i'm going to ask david this while we're waiting how much does us cost to build a foundry in the united states versus taiwan? >> well, i think it's two to threefold. >> five times. >> five times? >> five times. so, you wonder why it is important. >> five times. >> five times. said it several times in the call we cannot build foundries like they do. we cannot build the smaller foundries. we cannot build the foundry that handles nvidia we need to have boots on the ground to protect this operation. it was an incredible call. >> well, what you just said is -- boots on the ground?

really >> let's just -- we defend everybody else how about a country that is actually important to our military who else -- we defend anybody. why don't we use what we do in the philippines with the joint action, why don't we do it with taiwan look f look, if they hate us -- >> it's 50 miles away from the mainland >> you could swim. you're a big swimmer xi's rhetoric is so horrible that it reminds me of mao's rhetoric you see what he says about us? we're losers, our democracy is awful. i'm waiting for him to say we drink too much vodka or something. >> we'll see what yellen says. >> i think we're on the cusp of the ignition here. let's listen in again. >> ten, nine, eight, seven, six, five, four, three, two, one.

>> booster chamber is nominal. >> 33 seconds into the test flight of the inaugural starship vehicle. tower cleared. propulsion reports first stage engines nominal. what a sight from the grand cameras of star base we're flying at twice the thrust of the saturn v heading to space. >> throttle down and throttled back up. going through the period of

maximum aerodynamic pressure velocity increases the density of the atmosphere is decreasing, lessening stress on the vehicle. the callout. continuing to watch the first stage as we head down range. 100 seconds into flight. our next major activity is going to be setdown of the first >> just incredible to watch. starship >> just chills i remember when they all made us watch john glenn get off fwhefs elementary school, and it was like, oh my god, we're a great country. you know we're beating the russians they had sputnik, we've got this

wow. >> morgan, that's exactly what musk talks about is trying to think about the future once again with aspiration and not fear this certainly points to that kind of moment >> this -- listen, you can say what you want about elon musk, you can say what you want about tesla, about twitter, but when it comes to spacex, and the space industry and specifically this emerging, burgeoning, fast-growing commercial space sector, there's spacex and there's everyone else. and that is in evidence right now as we're watching this historic flight take place of starship this is incredible this is history in the making as the most powerful rocket ever built is now flying and making its way to orbit for the first time at about three minutes, guys, you're going to see this booster, if things go according to plan, it's going to separate from the starship transportation spacecraft it's going to fall back to earth for a controlled landing in the gulf of mexico, and you're goin

to see that starship structure that was on top of the booster, ignite its own engines, move deeper into space and start pushing towards orbital speeds in the second chapter of this test flight. >> so, the whole thing's going to take about an hour and a half, right? obviously, no personnel on board. >> nope. >> and there's no cargo this time >> that's right. >> and all of this will lead to, in terms of the artemis program, what in the next two years >> there are going to be many, many tests after this one. as i noted before, this is a system that is designed to be reusable they're not testing the reusability aspect on this flight but you're going to see those tests. you're going to eventually see tests that do involve crew you're going to see tests around the moon and if all goes according to plan, and there's other things that have to happen too for artemis, but you could see this system as soon as -- it's a very ambitious timeline -- but as

soon as 2025, basically take astronauts for the u.s. and our allies from lunar orbit down to the surface of the moon. it's a $2.9 billion contract for spacex with nasa it's the lunar -- the human landing contract, and it's just one example of the many ways that this starship system is going to be -- is going to be used both for government purposes and for commercial purposes it's very disruptive what the capabilities of this are going to be. the last thing i would say is it will be used for future starlink launches too >> it's going to be a remarkable day if we get humans on the moon in the next couple of years, morgan no one can walk us through it as well as you can. thanks to you. that's our morgan brennan watching starship in texas jim, that -- you know, it's kind of seems like tesla quarter or microsoft pulling their ad product from twitter seems kind of trivial in comparison >> look, i mean, there are moments in america where you

just have to wonder. we haven't had a lot of wonderment we see all those surveys, including our own survey, which just talked about gloom. i don't know those of us who are older, who remember that we became the champs of space, recognize that we are not, david, a pitiful, helpless giant >> no. we are not >> you care to expound upon my thinking or is that just -- >> well, i would actually go back to technology over overall and something that we haven't mentioned this morning and we typically do, which is a.i. and chatgpt. and what that's meant. again, you want a theme that may have duration in terms of an investing possibility. >> duration versus durational risk is that where you're going, henne youngman >> no, i'm talking more about meta and the metaverse i'm talking more about any number of things that have come along recently that haven't really given you an opportunity, but a.i. and chatgpt seem to be doing that and again, that's made in america. >> well, yes, and the taiwan

semi call, everything -- every line, david, every line was not good except for artificial intelligence, which is -- >> nvidia? >> thank you thank you for that >> it's more than nvidia, though >> no, with taiwan semi. it's more than nvidia, absolutely >> oracle is a small part of their business, but those who are going to be developing these a.i. models need to have a modern tech stack, and oracle may benefit from that. >> jensen highlighted oracle several times as being very good do you know that we have had this pattern where we open down and it's off europe, and then we just spend the rest of the day rallies. >> we're like downstream from what's going on over there >> yeah. i mean, look, the toll brothers, horton, ge catches a really nice upgrade. i see emerson caught a nice upgrade. yes, these -- the regional banks, i mean, we know it. we expect them to be as good as jpmorgan for heaven's sake

new core beat the numbers. i even see intel go up in terms of numbers lam research, there's a capital equipment negativity on the taiwan semi. darn it, look at lam research, this is incredible >> third biggest gainer this morning. does that take some of the asml sting out, then? >> i think so. look, lam lost $2.5 billion in orders to china. they still came up with a great quarter. how special is that company? san and they make the highest debt >> that's back to our little theme, a u.s. company. we still can make some chips, can't we make them quite well >> remember when we just made coca-cola and movies now we don't make movies very well, they're expensive, according to ike perlmutter. i'm drinking coco vita, one of the ipos of 2021 that actually made money can we just talk a moment about

chipotle >> chipotle. you want to come back to that? >> just because i finally saw the $2,000 target that i'm using. someone else is using it so, i feel good about that >> you should. >> did it the other day as a "mad dash. >> look at the qqq it looked like this morning, and i'm watching frank, and this show is really fabulous. it is. it's rat-a-tat-tat i love it. and it looks really bad. the market's bad it's like, woe is me looking forward to the launch. i don't know p pepto-bismol, alka-seltzer and boom, qqq, right on schedule >> yesterday, vix, 16, 17. spy volume, the lowest of the year >> that's the elephant in the coal mine. >> are you not shorting a dull market >> no, i just think that the only thing that was really worrisome was how robust american express was in terms -- >> american express is down over 5% at&t shares are down 7%.

tesla's still down 7%. >> i meant the spend >> those were names you want to short yesterday. >> the spending numbers. they had to take supervisions because they have much more business >> they even said the delinquencies this year will not surpass pre-pandemic >> this is an opportunity to buy the stock. they're going to maintain their year that's what mattered for steve sq squeri >> at&t's cfo, when i did ask about bad debt trends, they said, bad debt trends haven't changed. the consumer does continue to look strong. the amex spending numbers would show that. >> at&t's not down 7%. >> it is it is do you know 7% >> i was looking at it upside down >> yes, it is. but the consumer remains strong. now, i referenced earlier, john gray, blackstone reporting numbers. we can take a look there not really doing too much, i don't think, in the market but gray did -- john did weigh in on credit tightening, and i thought it was interesting,

guys, to take a listen to what he had to say as we take a look at the broader markets and where we stand right now because to your point about powell and if he looks at those amex numbers, spending numbers, what he may want to do in terms of tightening, well, the rejoinder might be that, you know, gray, at least, for his part -- by the way, blackstone would be the beneficiary of that. take a listen. he says banks are starting to get stingier >> i think the pressure on deposits still exists, and i think the biggest impact is that banks are becoming increasingly cautious i think they're going to be much less likely to lend to consumers and businesses, and i think this will result in more slowdown, less capital available, more expensive capital, and as i said for a firm like ours that manages over $300 billion of credit and insurance assets, i think there will be a lot of opportunities to lend capital. >> so, maybe talking his own book a little bit, but at the same time, he is somebody you want to hear from on these kinds of trends. >> yeah, look, you could argue,

well, wait a second, it's distribution they cut it a tad. it had been 91, now it's 82, i believe. >> at blackstone, you mean, the distribution >> yeah, look, i just felt that he, along with barry sternlicht, all they say -- not all they say, they're very varied, but they're ready. they're ready for when the banks shut down. they're ready for when the commercial real estate goes under, david here's a statistic for you are you ready? >> i'm ready >> okay. commercial real estate, when it's a c property or d property, the land underneath is worth 40% of the building, and there you go you're going to have to blow the building up. there's no conversion. it's $700 or $800 a square foot to convert forget that. so, david, look for -- >> you don't want -- don't look for "c" or "d. >> no good >> you don't even want "b" for the most part. >> someone is going to say "b" is not as good

>> gray said, listen, when you say commercial real estate, you're talking about a broad diversity of different types of properties from warehouses to datacenters to office space, and office space is not that large a percent of it. that said, sl green, jim, did report numbers the stock is down a bit. >> we don't have the call yet, so we don't know >> 41 manhattan office leases were signed. 5.3% higher for the first quarter than the previous fully escalated rents in the same spaces, they say, mark to market but again, the "a" is doing okay they say that they're at about 90% in terms of same-store leases occupancy not occupancy of who's walking into the building. that means that 90% leased but sl green shares are down about 1.3% it hasn't been a good year we've talked about it so often given where they are in terms of -- how many businesses are going to choose to reduce their

footprint? >> right, and yet warehouses, because of e-commerce, completely filled. >> yep >> not enough of them. i mean, there's just -- i think this notion of real estate is a bad term we really have to say it's commercial office real estate that was built in the wrong locations with people not coming back to work it's a very big deal and by the way, jay powell, make it louder, maybe made it louder for the launch, but auto nation was not that good, and cars, i think, are going to be part of the weakness, and that's something that elon made a point of in the call >> yeah, there was a revenue miss over at auto nation you know, on a day where everyone's talking about, oh, the transports are underperforming and small caps are weak and there's oils at the lows of the month >> how about that? >> we still got unp with a decent print and one of the winners today. we're seeing some transports perform okay this morning, jim >> transports are weird. you had hunt report that major miss and the stock goes higher union pacific is a very good company. i think we're still trying to get a real sense of what happened there with the changeover, the c.o. changeover,

but we've kind of given up on the rails post east palestine. maybe we have to revisit them, david. >> yeah. at spacex, it looked like it kind of blew up, didn't it >> i think the read right now is that it was a -- an unplanned separation but still, the thinking is there's a lot of good data that's going to get collected. >> i mean, a test is a test. but it didn't separate from the booster when it was supposed to? i was wondering what was happening as we watched it sort of -- >> it's not as good as -- >> the two stages, didn't separate, lots learned today, some argue >> it's a test i immediately switched into default mode it's a test. it's a test. >> that's why you do tests >> how about that horton they built a lot of good homes >> i would always defer to morgan on what we were actually watching when it went into pieces, but that did look like it -- >> yeah, well, you know, david,

it's not what we wanted to see but i'm looking at that housing business is doing well >> listen, man, it's rocket science. it's not like picking stocks it's actual rocket science it's hard. >> yeah, okay. well, toll brothers is good. >> morgan, let's talk about -- i guess they're calling it rapid unplanned disassembly. >> unscheduled disassembly that starship rocket did fail to reach orbit. it looks like it blew up over texas. spacex still calling this -- and this goes back to what i said earlier in the hour -- still calling this a success because it did leeclear the tower. it appears that starship did not separate from that super heavy booster when it was supposed to. it does look like -- and you see the video of it. it does look like there was an explosion. still gathering more intel and information here but this test, as it was

intended, has not gone according to plan. so, in layman's terms, i think you could probably argue it's a failure. in spacex terms, given the fact that this was a first test flight, orbital test flight, orbital attempt, they're still seeing this as very much a success, because i would imagine there's going to be to be a lotf data they will have gathered from this and they will be able to move quickly to continue to develop and tweak this system. >> how much pressure now is there on -- to the degree spacex has rivals, to either match or one up in terms of this -- this size of cargo, the pounds of thrust >> well, you're -- it's interesting you bring that up. space symposium in colorado springs earlier this week and sat down with a number of executives, the ceo of rocket lab, peter beck, in the small launch market, they're developing neutron, medium lift. not anything close to the power and thrust of starship, but whether it's that company or whether it's relatively space,

which is a cnbc disrupter company privately held and valued at more than $4 billion, that company has announced plans to go into heavier lift launch services with a bigger rocket than the one that just tested a few weeks ago as well. you're seeing the shift from small rockets to bigger, heavier, more powerful rockets the reason is because, despite the fact that you have an overpopulated rocket start-up market and the capital is drying up and you see the names consolidate, look at virgin orbit, for example >> sure. >> there is a capacity mismatch in the coming years. there's something like 100,000 satellites poised to or applied for regulatory approval to go to earth orbit and there are not enough launch vehicles and capacity to carry them all there. starship is huge because it's going to be able to bring so much more payload to earth orbit. we talked about the moon and

mars earlier, so much more payload to earth orbit than we've seen before. because of the reusability factor, once they get this working and operational, the cost is going to come down dramatically. >> right the ability to reuse has changed the unit economics forever is the business thinking more about sort of lunar type missions, as opposed to the 15, 20-year aspirations of mars? where is the line in terms of getting early practical use under our belt, but still shooting literally for the stars? >> so i think it's in three stages, right. you've had the commercialization of low earth orbit nasa has helped to spearhead, but also in general, commercial companies doing their own things with private funding. the next stage of that over these coming years and you're already seeing some of that money flow towards these types of projects is lunar and then mars will be somewhere behind that so over the next decade, you're

going to see much more activity in deep safe, but you're also going to see much more activity, like heavy manufacturing, which is where some of the vc dollars are going, in low earth orbit as well. >> morgan, appreciate that, helping us understand what we saw this morning morgan brennan, to her point, jim, there's going to be a whole industry that's built upon supplying this kind of stuff. >> it's great. we got a little too excited about it what matters, it's going to be an industry, like, you know, for instance, people made a lot of money in the end phase in solar. a lot of companies to make solar it turned out to be a much bigger deal. as it like that. it's a brand new industry and people should be focused on it at the same time, i'm focused on aerospace and i think we have found a winner david, ge is now at top 5 s&p name for the year. >> wow. >> ge. >> it's being viewed as wait

the -- the way to play aerospace. >> trades at 50 times earnings. >> it's going to have a very good multiple because it's the best aerospace, clean aerospace. doesn't have the chinese saying nasty things about them like raytheon, boeing we know has some problems making whatever plane you want to mention, i guess, i don't know. >> finally time to own ge. >> no. it's the time to own ge when it was at 80. >> that's my point it was finally time. >> ge health care such a good company. >> ge health care spin and the stock itself, as you say, has been running what he they want it to be, eventually a pure play really in terms of aerospace. >> he then delivered and we don't talk enough about how good larry culp is. it's kind of under the radar this thing is a top five s&p name because larry culp came up with the spinoff $20 a share. initially the spinoff was viewed very -- with a yuan. no one is yawning now. look at that

>> we don't talk as often as what is still a part of the business, which, of course, is the energy part of it. >> there's a positive note out saying that it could be worth $20 a share. >> right. >> they come up with these names. they just -- all you have to do is go into chatgpt and say what's a good name for an energy company and they will come up with something better. >> without a doubt. >> how much would that cost you -- >> cost you nothing. >> right that's a good example, by the way, of what's going to happen in corporate america. >> what's happening. >> when you do your spinoff you gon and it's going to be better and all the money you spend, this is the copyright issue. if you're a writer or someone supposed to come up with fancy funny things, no, chatgpt has got you beat must be like wake up in the morning and say oh, my god they're going to beat me and then they beat you. >> there is a larger question as to whether one day it will replace software as a service,

to come up with solutions for each company to minimize the need for - >> maybe in three months >> look. it's moving so fast. >> things are moving quickly. >> things are moving more quickly than we do. >> what's going to be on netflix tonight. it doesn't do that we're in late stage capitalism they're the capitalism of jpmorgan of vanderbilt. >> late-stage species. >> we're late-stage species. >> late stage. >> had a good run. >> we had a real good run. not as good as the dinosaurs, come on. they roamed the earth 300 million years. >> the bone-yard pit thing, the guy found the bones in one area - >> no. >> worth a listen. >> i did hear the fake conversation between joe rogan and sam created by a.i. >> the combination between the executives at fox -- they could have used chatgpt that would have been like should i say this chatgpt. >> what do you got

>> we've got anna botin, san tan der and then topalian who reported better numbers. look at spain and anna botin, quietly becoming the only bank scandal free, doing really well. there was a time when credit suisse would have looked down the nose of san tan der. santander can't see credit suisse they're like ants. >> credit suisse is gone it's going away. >> i'm just using that - >> ubs now or about to be. >> we got to go. >> all right. >> i said that to be ahead of when chip said we have to go. >> you would be good in the booth. see you at 6:00. we have data coming up, existing homes and lei in a minute. you got this. let's go.

gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

good thursday morning. welcome to another hour of

"squawk on the street. i'm sara eisen with carl quintanilla and david faber, live for you as always at post nine of the new york stock exchange early action is lower across the board following some of the overnight and overseas markets s&p down 0.6%. for the week down about 0.2% every sector is lower right now. consumer discretionary getting hit the hardest. financials down 0.5%, industrials down 0.2%. three earnings movers, american express under pressure out with a q1 profit miss revenue did beat and the company reaffirmed full-year guidance. the stock down 4%. another name sliding is zion's bank corp missing earnings expectations, deposits falling 16%. we're following regional bank stock reactions. we'll end with las vegas sands, beating earnings and revenue expectations following what ceo calls a robust recovery in travel and tourism spending.

we are just getting some breaking news, carl. >> we are. lei in existing. rick santelli, hey, rick. >> carl, yes, we have lower stocks, lower yields, higher continuing claims, and significantly lower philly eight negatives in a row, leading economic indicators for march joining that list. 12 negative consecutive months in a row minus 1.2%. that is the weakest month over month change since april of 2020 and to top it off, negative revision in the rearview mirror from down 0.3 to 0.5 also, out, existing home sales for the month of march and for that, we head east to diana olick. diana? >> rick, existing home snaels march dropped 2.4% month to month to a seasonally adjusted annualized rate of 4.4 million units. that's right along expectations. sales were 22% lower than march of last year

these are closings, contracts signed in january and february when mortgage rates came down and shot higher. supply did come up, but historically low totally inventory at end of march 980,000 units, up 5.4% from a year ago. at the current sales pace it's 2.6 month supply, a six month supply is considered a balanced market that tight supply is keeping prices from cooling as much as some might have thought. the medium price of a home sold in march was 375, $700 down 0.9% that's the second straight monthly drop prices rose in every region except the west which is, of course, where homes are most expensive. all cash big at 27% of sales but investors are pulling back at just 17%. they had been as much as a quarter of market last summer. back to you guys. >> all right adding to a string of data misses thank you very much. stocks under pressure, bonds are rising with yields down and

the dollar is weaker as well turn to the stock story of the day, tesla, which is also under pressure, after net income and earnings fell more than 20% from last year and the -- i don't know why it was such a surprise margins were under pressure. they were cutting prices and cutting prices so many times, i think six times this year and yet came as a price to seat margins, at motive gross margins, including leasting under 20%. that's a point where analysts were wondering, are we on board with this strategy >> yeah. gross profit per unit basically is back to 2019 levels one of the highest pain tolerance if you're going to grow volumes, you can produce it cheaper and maintain lower prices for longer and not just competing against u.s. oems but the chinese as well, especially in europe. >> yeah. and in the chinese market, which we've talked about didn't come up on the call as

much as we might have anticipated, perhaps, but fierce competition there. chinese domestic brands starting to take a lot more share obviously, some of them at far lower price points not really necessarily competing in the same price point. but the question, sara, is do you go for volume over margin and try to seize more market share? and then over time as you transfer or move to full autonomy, there is a sort of recurring revenue business model for tesla? that, at least, is what mask pointed to on the call. >> he talked about the full self-driving as a silver lining. not sure the street is fully on board with it. to your point, sales did -- they sold 36% more vehicle. sales shot up on the back of the price cuts here's how elon musk on the conference call last night talked about the margin pressure and their strategy. >> we do believe we're laying the gronds groundwork here and better to ship a large number of cars at a lower margin and

subsequently harvest that margin in the future, as we perfect autonomy. >> the question is you brought up the competition they're trying to assert themselves as the dominant player that can do this and grow market share and vols at a time where ev adoption is rising, but the legacy automakers they have their businesses, the traditional businesses, to depend on that are profitable, and i'm not sure they're at the point where this makes a big impact that will be interesting to tell when we get earnings from the automakers. >> the ongoing discussion about why crude can't catch or hold a bid above 80, worth the lowest levels of the month, down about 5%, and i mean, will oil prices and gas prices create enough urgency for the adoption curve to continue to go higher that's the issue if drivers look around and say gas is still 3.50 a gallon,

maybe i can wait another couple years before investing in chargers. >> if they lose the credits from the inflation reduction act, i don't know, maybe they will want to do something good for the environment. >> the charging environment, hard to imagine right now having so many evs on the roads where people are using them in their everyday life for longer commutes, going on road trips, given consuming amount of time it would take to find the proper place to charge and how long it takes, too it's still a ways to go. >> i read some of the analyst research this morning on this, adam jonas, morgan stanley, sticks with the bullish call, takes down the price target, van ives of wedbush, takes down the price target they're saying you got to be patient on the margin strategy, not looking at it as a game changer on the stock and on the financial performance, though both acknowledge and some of the other bulls acknowledge it's going to make for some volatility here in the results as we've seen on profits. >> right still have the highest margins

of any automakers, night still even with the reduction they're still above gm. >> and even excredits. >> keep an eye on consumer credit the other big story of the morning as we get the bank earnings as well we're getting results from discover financial servicesp they missed earnings revenue but card loan growth coming in at 22% year over year joining us for an exclusive interview to talk about the consumer and overall environment is discover ceo roger hoshchild. thanks for joining us. what do your results say about the strength of the consumer right now? >> so you know, we have seen sales achieve, and that's gone on into april down to about -- up 2.6%. overall, the consumer is hanging in there, and i think it's the strength of the job market that's happening today we actually narrowed our guidance for the year.

>> in other words, you're not seeing distress? you're not seeing missed payments or recessionary type behavior >> no. we are seeing losses normalize from the extraordinary low levels that we experienced during the pandemic. but there's still normalizing exactly in line with what we forecast. >> you did miss overall earnings on higher than expected provision expenses what calculation has gone into that what do you expect >> so i do think [ inaudible ] a bit of a deterioration in the overall economic forecast and unemployment and keep in mind for us, weak provision for the life of the loan, provisions for losses that show up next year or the year after that as well. >> are you being affected by the bank failures? are there any second and third order effects for you? >> so i think it's an

environment where our business model looks even better. you know, our deposits were up 70% year over year i think we benefitted from that. but even before the bank failures we were seeing strong growth in deposits actually coming out of the money center banks where consumers are looking for that better rate that we deliver with our low cost digital model >> to the extent you had a higher reserve ratio this quarter, if credit metrics are still sort of normal, are you anticipating they're not going to be? that they're going to worsen >> yes i do think they're continuing to move up. they're still at attractive levels it depends on what happens with employment i do think there's good underlying trends in terms of the restoring of manufacturing, strong hiring in health care, so i for one am a believer in the

soft landing scenario. i do think this is still some deterioration to come in the economy. >> what are you seeing as far as inflation impact do you see it in certain categories or certain behaviors? it's been amazing how resilient in a way the consumer has been to this inflationary shock. >> yeah. great point. for us, we focused largely on the prime consumer and they still have enough household liquidity to deal with inflation. so they will trade down. right. they won't go out to dinners frequently, may cut back on travel, but they can still make it work and service their debt and delinquencies and charge offs have held up well, even in this high inflation market >> roger, thanks for joining us. it's a really good color and good snapshot of what we're seeing from the consumer appreciate it. >> my pleasure thanks a lot. >> as we these break our road map for the roeft hour, janet

yellen delivering remarks on the economic relationship between the u.s. and china we have details. >> plus at&t shares are down this after results one of the biggest laggards on the s&p this morning. >> and as spacex biggest rocket launch test ends with the explosion, what happened this morning when "squawk on the street" continues. you can't buy great conversations or moments that matter, but you can invest in them. at t. rowe price our strategic investing approach can help you build the future you imagine. t. rowe price, invest with confidence.

as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business:

comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network, with no line activation fees or term contracts... saving you up to 75% a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities™.

treasury secretary janet yellen set to speak on u.s.-china relations this morning. she's going to say she wants constructive economic ties with china but push back on the country's efforts to dominate foreign competitors. guys, i expect this speech from treasury secretary yellen to be less hawkish than some of the other members of the administration and other politicians, janet yellen style, thoughtful on ways to collaborate with klein but also ways to stand up for them and to prioritize national security over the economy s in her speech she's set to push back on this notion that has got an lot of attention lately but said it's a reoccurring pronouncement of the u.s. in decline. she says people have been saying this forever and we constantly find ways to reinvent ourselves and the economic data will speak for itself and talk about the strength of the economy overall. as far as anything super hawkish or policy pronouncements not expecting that which might be good news for the markets which

gets rattled by that thing. >> it follows hank paulson's interview a few days ago where argued she doesn't want a war with taiwan any more than we do and that great powers don't seek out war, they stumble into it. tone it down a bit a man who has treasury secretary -- started long standing discussions between the u.s. and chinese. >> there's an interesting shift in momentum towards economic growth in the last few years china coming from a place of weakness, zero covid policy, the property sector, tamp down on regulating the tech industry, hurting china's growth and they were from a weaker position there while the u.s. was booming it's reversing the imf is forecasting growth for china and we've gotten a taste in chinese gdp this week they're growing strongly, 5 to 6% this year it's going to out grow us. in terms of the dynamics here of growth we're monitoring all this economic data coming in from the u.s., which is turning

philly fed index today. >> they shut their economy down and didn't do as much stimulus as we did. less inflation now. >> all reasons for why and now they're stimulating and opening up and i'm just saying they're moving in different directions and for the market the focus is on the u.s. data and how much we're slowing and whether we're going into recession that philly fed manufacturing index was ugly jobless claims picked pup we're watching the trends. >> yeah. >> john williams, new york fed president, more rate hikes are coming. >> is that what he said? >> there's still -- we had a number of fed speakers, even more this afternoon, the blackout period is starting tomorrow afternoon so they're getting their finally message in inflation still too high and we will use our monetary policy policy tools to restore price stability. i am confident we will attain and maintain a sufficiently restrictive stance to bring down our goal that's someone more worried about inflation than recession

and that's the message we've heard from nearly all of the fed presidents. >> he was talking about not yet seeing full signs of credit tightness, by the way, his board member scott rechler joined us and said i'm seeing it, and he and williams seem to disagree on that. >> he sounded different, williams, in the speech last night to nyu. >> than he did a couple weeks ago? >> by the way, did you see the beige book yesterday >> i know you love the beige book. >> i love the beige book. >> i missed the beige book. >> read it this weekend. >> i will spend time with the beige book. >> cup of tea and the beige book they give highlights from the various districts. small to medium sized banks in the district reported widespread demands in loan demands. credit standards tightened for all loan types that's in new york go to st. louis or minneapolis, it's like not as big of a problem. banking conditions in the district have remained stable. >> what account s for that. >> a majority of our contracts reported no effects on our

organization. >> explain this. >> san francisco also, very much stronger tightening standards and fewer loans. new york and san francisco banks, feeling it harder there's more of them. >> a lot of assets in new york banks, we used to call them the money center banks for a reason. >> and for whatever reason, you're seeing that. >> i thought we were actually going to see the regional banks being the ones that pulled back, particularly given the deposit outflows and saw zoins in what that's going to do making cost of funds more expensive. >> might be slower to come there. i don't know in st. louis they gave an anecdote about one memphis regional bank getting inflows from clients who had their money in some of the failed or distressed west coast banks. there's a lot of money moving around the system there, but i think the upshot of the beige book and we know fed chair powell watches this and cited it before, credit tightening is happening. maybe not universally across the

country, but it is happening and they are going to be paying attention to it. so far it's not leading them to slow down with rate hikes. >> i reference the comments from john gray on "squawk box" earlier, blackstone president, saying the same thing. he expects there's going to be tightening and you'll start to see it. >> nobody expects cuts except for the market saving the cuts. >> said the market is overestimating the possibility of cuts and gorman said cuts but if not until the market is in q1 mode. >> said high fives to 6% of the terminal rate. >> not where the market is. >> what's going to happen, sara? >> the market is wrong or everybody else is going to be wrong. >> that said, this seems to be the most anticipated recession we've had. a lot of market participants starting to take solace from that somebody said it shakes off exogenous events all the time. sell side may get too negative when it comes to numbers coming down there may be a positive tone in

terms of just how often we talk about these things, the market shrugs it off. >> leading economic indicators which came out at the top of the hour, negative again it's been negative for several months and it is always a good recessionary tell in the next year and so far -- and now people are saying well, i don't know. >> yeah. >> maybe we shrug it off and ignore it like the yield curve, right. >> well, speaking of stocks, though, at&t is not shrugging what is not being a well received earnings report, at least investors certainly running away from those shares this morning that's a significant decline best we can tell having spoken to the cfo, this seems to be about free cash flow came in with a billion some analysts estimating $3 billion in free cash flow. they are sticking to their full year target. it's one of the key measurements this company is, you know, one of the key metrics it is measured he said we pay for our devices in the first quarter that we

bought in the q3, q4 we have incentive comp in the first quarter. billion may have still been shy of what many had been anticipating even all those events into account. we'll be back. we're back good night! hey corporate types. would you stop calling each other rock stars? you're a rock star. you are a rock star. rock stars. please! do you know what it takes to be a rock star? i've trashed hotel rooms in 43 countries. i was on the road since i was 16. i've done my share of bad things. also your share of bad things. we know that using workday for finance and hr makes you great at your job. but that don't make you a rock star. ted! ted! ted! oh ted in finance. you're a rock star! hey liz in hr? can you do this? unless you work with an actual rock star. you are a rock star! thank you! who's the new guy? hi, i'm ozwald.

hello ozwald. give it up for pam. pam, you are a rock- [silence] i wasn't going to say it. ♪♪ you founded your kayak company because you love the ocean- not spreadsheets. 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 (vo) businesses nationwide are switching to verizon business internet. matching your job description. (woman) it's a perfect fit for my small business. (vo) verizon has business internet solutions nationwide. (man) for our not-so-small business too. (vo) get internet that keeps your business ready for anything. from verizon.

♪♪ choosing miracle-ear was a great decision. like when i decided to host family movie nights. miracle-ear made it easy. i just booked an appointment and a certified hearing care professional evaluated my hearing loss and helped me find the right device calibrated to my unique hearing needs. now i enjoy every moment. the quiet ones and the loud ones. make a sound decision. call 1-800 miracle now, and book your free hearing evaluation.

stocks lower today on earnings pressure, but check out the home builders. the home construction etf hitting a new 52-week high meantime existing home sales down in march. down 22 year on year our next guest says there's not enough inventory and buyers have accepted 6% rates may be the new normal the ceo here exclusively great to have you back thanks for being here. people pointing out even in a down tape, what does that tell you about the market's willingness to look through some of this stuff? >> in march existing home sales were down 2% year over year. that's not a surprise. we're the number one brokerage firm in the country. buyers have accepted these mortgage rates as a new normal there's a lot of pent up demand.

the issue is really not enough sellers and inventory as opposed to not enough buyers our website traffic increased 18% in q1 versus q4, however inventory exiting q1 was 9% less than exiting q4. >> so nobody wants to give up their home in which they locked in years ago >> the fundamental issue is that 30% of homeowners are locked in mortgage rates at 3% or below and then you have 72% of homeowners locked in at 4% or below. if you have a 3% mortgage rate, you consider that a financial asset and don't want to lose it. >> unless you were forced to move, i guess. if unemployment went to 6 or something you have to think about being more mobile but hasn't happened. >> it hasn't happened. every single week this year less inventory has come online than the same week in the prior year. however, there is 60% more inventory today than last year because thebuyer strike in the

fall left the end of the year with more inventory. >> so the fed wants to bring down inflation and housing is a really big part of it, right, on prices and on rents and has remained high because of all these factors you're talking about. is there movement? >> prices for sales were down in march 1%, little less than 1% year over year same in february less than 1% year over year. however, sequentially, prices are up prices are up in march over both february and january. >> what about rents? >> rents if -- rents are flat year over year in new york city, they're moving up new york city rents hit an all-time high in january and march. now $4,175 a month. >> seems hard to imagine some ways given some of the economic realities that seem people not going to the office, what accounts for that and how connected is it to the sale, to the purchase market? >> so as prices remain

stubbornly high for sales and mortgage rates are high as well, affordability is a real issue on the sell side and combine that with the lack of inventory it's driving people to the rental market. >> what are we seeing in the markets that benefitted from the movement of people out of cities to other areas as a result of being able to work remote places like boise, idaho or las vegas >> the markets being hit most in terms of price, the markets that are cooling are the pandemic boom markets like you mentioned boise, idaho, you have las vegas, you have phoenix, they're getting hit the hardest. >> it's funny, redfin has had some data out the last couple days and quoted a realtor in boise, who said i was consistently busy in the fall but things got quiet in march after silicon valley bank. how much of this is sort of the jolt of fear that was at least centered in san francisco in match? >> the silicon valley bank impact, it's been there but much less than expected i think part of what's hitting

the pandemic boom markets are ceos across the country are asking their employees to come back to work i think people have realized it's not about productivity. it's connectivity. leaders have an obligation develop their people and hard to develop people virtually than in person. >> have you seen banks change the way they give loans? are they tightening those credit standards? >> the jumbo market, historically relationship loans, people are willing to put a 500,000 or a million of assets with the bank you're doing that, but the spread between conventional and jumbo is smaller now. >> would you be net net over the next 24 months you would rather be long urban than suburban or sflurrural? >> from today's prices urban markets will see a greater increase than other markets. >> on net reversal of work from home >> exactly still see a lot of people moving to warm weather, low tax states

like the carolinas and florida as well. >> fascinating a lot of cross currents. good to see you. >> thank you. after the break, tesla tumbling, one of the biggest laggards in the s&p this morning. we'll speak with an analyst and a shareholder on the road head the laggards led by at&t and that regional bank sfx: [alarm] every day you get to choose. do i want more? can i grow stronger? can i get better? bodyarmor lyte. more than a sports drink.

market continues in the range we've been in. today more about earnings disappointments, some weaker prices in the energy complex you got oil below 78 today and, of course, watching more long-term things like the spacex launch today we'll talk about what happened on this failed separation when we come back

- in the last two years, we quadrupled our team and the pace we're growing, i couldn't keep up without ziprecruiter. they do the legwork and they get my job posting

in front of the right candidates. i love invite to apply. i instantly see great candidates and i can invite them to apply. we have hired across all departments, engineering, marketing, hardware, field techs. you can basically tell ziprecruiter who you need, when you need it, and they deliver. - [narrator] ziprecruiter. rated the number one hiring site. try it for free at ziprecruiter.com try it for free at ziprecruiter.com

check out shares of ibm, little changed slightly higher today beating on earnings, slight miss on revenue but demand is holding up and narrowed the forecast for growth but reiterated the free cash flow guidance. i talked to the ceo of ibm, a lot of people look at ibm as a proxy for business spending and turnaround story in itself across all the business units, software came in line with expected here's what he said. actually i asked him about the comparison with cdw which reported earlier an an i.t. software firm. he said we're not a consumer they have pc and hardware exposure business spending is holding up well the place they're seeing softness consulting business, little bit slower growth than expected there, and he said, that's because of second order effects of the banking crisis. smaller businesses are feeling it which feeds into the bigger businesses which are their

customers. he said it's not that customers are canceling orders on services on consulting but pushing it back, they're prioritizing projects that cut costs, that sort of thing. as far as overall demand for tech spending, he said he still expects it to outgrow gdp by 3 to 5% and that that shouldn't necessarily change and painted a good picture said asia is looking well. north american noise he said is not happening in asia. europe is much more resilient than he expected and then the u.s. just pointed to what they're seeing in terms of the consulting slowdown a little bit but again, nothing extreme in terms of a demand drop. >> kind of fits with what the macro view for some is and that is, even in the face of weaker gdp, i.t. intensity gets stronger, bigger portion of economic growth related to tech. >> because you have to prioritize digital in this

environment and when it comes to cost cutting and being productive, it's a way to do that as well you know, he also talked about a.i., which microsoft and alphabet get a lot of credit on a.i. on the consumer side of things but when it comes to b to b a.i., this is what they're about. you're not going to see it broken down in ibm results because it permeates all of their businesses they're in the early stages but said chatgpt is a net scape moment like net scape was for the internet, chatgpt and it's going to affect everything they do for businesses as well when it comes to digital work flow, talked about health care opportunities, helping - >> clinic. >> helping cbs take calls from customers that sort of thing and minimizing the amount of people needed to do these i.t. services which isn't bearish for the labor market because it's hard to find people to do it because there's a shortage to begin

with. >> a good look at an important company. meantime spacex's starship rocket did end with an explosion today. let's bring back morgan brennan who talked about that launch this morning morgan your thoughts about what we know so far. >> this is still very much a developing story, but here's what we know it was a major milestone for the space industry as the mega rocket system starship did lift off from bocachica texas and take flight. it suffered a mid flight failure and fell short of reaching space, climbed to about 39 kilometers at about 3 minutes post liftoff, what was supposed to happen is starship was supposed to separate from its super heavy booster. and continue a flight that would last about 90 minutes before splashing down off the coast of hawaii here is what happened at about 3:59, just shy of 4 minutes after that liftoff take a listen. >> right now it looks like we

saw the start of the float but seeing from the ground cameras the entire starship continuing to rotate. we should have had separation by now. obviously, this does not appear to be a nominal situation. >> it does appear to be spinning, but want to remind everyone everything after clearing the tower was icing on the cake >> and there as you saw, as we promised, an exciting end to the starship inaugural integrated test flight. >> so perhaps a mixed messages there if you're listening in, but let me put context around it this is a very experimental first orbital test flight for spacex's new starship. because of the experimental nature of this launch, you could call it a failure because the

mission did not go as planned, but for spacex and for elon musk, repeatedly, what has been said leading up to this moment this morning is any results that would get starship off the launch pad would be deemed a success. so perhaps that is why you're hearing that applause because it did get off the launch pad it did attempt this first test flight but it did not go as planned. the mission was a failure. in terms of starship and this moment, here's what elon musk tweeted a short while ago about this they learned a lot for the next test flight and the expectation that is going to happen, the tweet right there, the next launch in a few months they're going to take this data from the first attempt and they're going to tweak and continue to develop starship for the next attempt in the meantime there is nothing like this system on the market

or in development in the market in terms of pounds of thrust, payload capacity and the prospects of reusability that is why this is watched so closely and that is why it is still in a sense something of a win for spacex today >> morgan, just to put -- the booster was supposed to come down on its own if it had succeeded fully? >> the booster was supposed to detach from starship and then engage in a controlled landing into the ocean, into the gulf of mexico, starship's engines were supposed to fire up and it was expected to start climbing into orbital velocity and continue its journey before splashing down off the coast of hawaii as you can see with the video there, that is not what happened a, quote, rapid unscheduled disassembly is what spacex is calling that. >> we kind of watched it, but it was unclear. what confused me the applause

and cheering, i thought, i must not be seeing what i think i'm seeing. >> we were having the conversation and this was happening as we were finishing our coverage of that initial liftoff and those minutes after. it's important to keep in mind, for spacex, they still deem this a success, hence the applause, and in terms of starship, we've never seen it fly like this before so this is very much a first and reference point for future tests and there will be more. >> a big day for america is this what's going to take us to mars? >> this is the system when elon musk talks about colonizing mars, nasa talks about putting american boots back on the surface of tn the moon this is e system there's a big business case here too. commercial space, civil space, military space, everybody is watching development of this system very closely.

>> morgan, thank you for the continued coverage there morgan brennan, of course, with what is still a developing story. >> you know what else, a 420 liftoff. >> yes. >> today is 4/20, maybe that's why it got delayed he loves 4/20. >> up in smoke. >> let's stay in the musk yoo universe, so to speak. tesla down after the company reported the lowest quarterly gross margins that it has had in at least about two years our next guest says while it remains the ev leader tesla needs to step up its game. joining us is vijay with a buy rating on the stock, though he did lower his price target and now 230 and had been 250 we've got tesla shareholder ross gerber ross, you're usually outspoken on this name one way or the other. do you think he should be stepping up his game and specifically, to that margin

number i'm curious to get your thoughts >> well, absolutely. i think the sort of huber tesla is still in the same place several years ago when it had no competition and much better image, i think that it was easy to sell cars at a premium, but what we've learned now is that there is an issue with competition and demand and the thing that, you know, bothers me is they don't want to use the typical things that companies do to create new demand like advertising. it seems like if you're willing to continue to discount the car that it would make a lot of sense to try other ways to create new demand considering 90% of americans don't have an ev and i think a lot of them aren't really sure the value proposition of an ev which is quite amazing. so that's why i think tesla needs to step up its game and create more demand for its sflo products >> vijay, give us your take on their decision to go after volume versus price. >> look at tesla, they are the

cost leader in the industry. i think they have the best margins at almost -- still in positive 20% gross margins versus look at the other ev players, start-up, legacy oems they have a negative 30, 40% gross margin, negative profitability. obviously, tesla is using that strong cost position to leverage pricing and gain market share. i think if you look at what happened in the march quarter and today, they have cut prices almost 15 to 30 and that is reflected in the margins, but we see tesla as a very strong market share gainer over the next year or two years given the benefit from subsidies, while many of the ev oems, kia, bmw, honda, toyota, all these guys, do not have the benefit of the subsidies that tesla will be getting. given the combination, strong

possibility and the subsidy, it makes a lot of sense for them to take share, take that market if you're buying a tesla, you're locked in that market. that's almost a record revenue base for tesla from software or services or insurance, financing, all that. it's a pretty smart move and i think people might be missing the near term but macro wise, tesla does have the back half we have a consumer, rates going higher and those are not good combinations broadly for the market. >> meantime we can talk about driving volume with lower price, but taiwan semi called out auto weakness in particular and we're having a rough day on names like wolfe and nxpi how worrisome is that when you're trying to produce more volume at lower price, maybe the volumes may be challenged?

>> right and i think, you know, we're in a sort of transition in the economy with higher rates right now. we're not in a recession and we have seen decent auto sales in q1 across the board. demand hasn't fallen off a cliff definitely for technology products it's different but automobiles, you need a car, you need a car i think this issue of like gaining share, they're actually not gaining share, they're losing share against the ev competitors and lowering prices isn't them trying to maintain share. it's them trying to sell the volume they have because inventories keep rising. that's, i think, the thing tesla is executing in so many areas long term that we're bullish on, but on the short term they need to create more demand for their products and it is an older product now and a refresh would help them greatly. >> i don't know. do they have a demand problem? >> there's -- the consumer is in

a stressed position. when you look at auto prices they're up 30% interest rates are at the top. definitely, you know, the consumer, there is a consumer demand problem the point we're trying to make the market there is for tesla's taking they have the best profitability, the leverage to drop pricing because they are a beneficial subsidy and they will do it. when you look at the other oems coming to the market, mathematically they will take share, but the pressure on the margin, the profitability is immense. they don't have the same subsidy that tesla is getting. we think that people are, again, might be missing the case. these guys are ramping production if you think there's a low cost model coming, that would be a massive disrupter for the ev market drive significant demand elasticity there. >> ross, finally, i mean you're being critical here but you're still a shareholder, i believe

so what is giving you confidence or, you know, the prospect of future profits autonomy the energy business? what are you seeing in terms of why you're staying in there? >> well, it's total com dominance and i think what's happening now is short term and. i was just in austin the manufacturing ability of tesla, the technology advantage of not just in full self-driving and autonomy, but in the actual battery technology they're now developing is phenomenal and once again, they're going tore the lower end of the market if they have a $25,000 ev, they'll sell those forever i think for long-term investors, you take a pause, we don't just sell the stock, what you know i mean we're long-term investors in tesla and this is a period of time tesla needs to focus on their business, get the cyber truck out and advertise their products because still 90% of people don't have an ev in america and they're paying $150

to get gas right now it's crazy, you know i think tesla, if they make their value proposition to consumers, they'll sell all their cars at their current price. >> thanks to you both. we have more earnings to hit next hour. don't miss an exclusive with synovus financial. plus the ceo of philip morris international as shares plunge after revenue comes in light for the quarter. we'll be right back here on "squawk on the street. dow is off about 80 points a number of sectors turning green. material and energies -- excuse me, material a svis.nderce energy is the worst performing sector

ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

new video obtained by cnbc it's of a fire that started in a ford f-150 lightning previously this year. the previously unreleased video shows it from a ford holding spot if you want more on the fire,

head over to to cnbc.com. we've got a bunch of earnings, some of which are not being well received, including at&t what's your overall thought? >> everyone got excited yesterday because the banks rallied so strongly and now the opposite thing is happening, unfortunately. we're just declining blame it on tesla but it's the regional banks weighing on things take a look at the sectors semiconductors are holding up well taiwan semi is helping, but health care, a defensive sector, is weak today. normally on a weak day you get defensives doing well. that's not happening oil is 83, going to 77 now that's really killing that sector it's the banks they weren't all bad nucor was pretty good. union pacific was good but fifth

third was a disappointment we had a lot of issues on that one. net interest income was moving to the downside. we saw average loans kind of flattish average deposits were down a little bit everybody was talking about how there wasn't a lot of people fleeing on the deposits. that's how you know it's a concern when they tell everyone, don't worry about it tesla, that's a real tax on the s&p 500. when tesla is down 7% like that, that's a real issue. look what's going on in europe right now. they're killing the european autos on this. stellantis is down the cfo of renault came out and addressed tesla saying, we are not going to cut electric vehicle prices on our line just because tesla is doing it, saying it would be ruinous for the car business he said if it results short term, so be it they're resisting the price cuts you see everybody is getting hurt badly

overall, it's not terrible dr horton was great and all the home builders are at 52-week highs. we see pulte and lennar. we have 80 companies reporting for the s&p, almost 20%. 4.9% beat on the earnings overall. it's not bad but it's not as good as it was a couple of days ago. q2-q2 stable but estimates not as good as they were even two days ago. >> we'll see if the market keeps skating by bob pisani. that does it for this hour of "squawk on the street." stay with us for the next hour

good thursday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla and sara eisen. setting the agenda, bernstein remaining bearish on tesla after what he calls a meaningful shift in rhetoric. plus, citi's nathan sheets pushing back the timeline for recession in the u.s he joins us to