good thursday morning. setting the agenda for us today, a late breakfast with dave we'll get his market reaction post inflation numbers and his recession outlook for the rest of the year. >> bill rudin with us at the exchange, the commercial real estate crisis brewing in some of the country's biggest cities.

two of the most popular brands for consumers joining us on earnings. let's begin with some regional bank turmoil. pacwest shares down big today after recording this big deposit outflow and news that the fdic has a plan for big banks to cover up the losses of svb let's get to leslie picker. >> you can see pacwest shares are down 22% there was a revelation in a filing this morning that showed deposits fell 9.5% in the week through may 5th. that was last week as you recall, we heard the evening of may 3rd and cnbc also confirmed they were having discussions with potential partners, be it investors or strategics to evaluate their potential options here normally that would send shares higher that sent shares down about 40% on the week. we now know from this filing this morning that spooked depositors they saw some significant outflows in addition to the about 17%

declines they saw during the first quarter in the wake of the silicon valley bank and signature failure. all of that to say what you're seeing right now with the current stock price, likely not too good with regard to the customers of that bank if we see kind of a repeat of last week's activity in terms of deposit outflows on the flip side there's western alliance which offered an update on its deposit activity. has been wrapped up in all of this concern and turmoil over the last week and a half or so they say that actually their deposits were up about 6$600 million since updating the market on may 2nd. you can see shares of western alliance reacting to that as it becomes apparent that western alliance not in the same camp in terms of outflows that pacwest experienced last week. western alliance came out and explicitly said any reports suggesting they are having kind

of those strategic options conversations, not factually accurate they haven't heard advisers. they're not having those discussions. kind of opposite situations on that front and then you mentioned the fdic news this morning. this involved their deposit insurance fund and the hole left after silicon valley bank and signature bank failed. and they basically came up with a plan they're proposing at a meeting that ended a short while ago that suggests the big banks that have the largest amount of uninsured deposits will be the one to make up the bulk of that $15.8 billion gap left behind from the systematic risk exception enacted to cover those uninsured depositors in the wake of those two march bank failures this is material this would be material to big banks resulting in an estimated average reduction of income of

17.5% if all of those fees were paid in one quarter. >> i guess the question from here, leslie, and you talk to a lot of investors and analysts, is how to achieve stability in the regional banking sector. the fact we haven't seen any meaningful bounce from oversold conditions i know there's earnings pressure, but what is it, is it a response from regulators, is it extending deposit insurance how does confidence come back? >> yeah, deposit insurance is a key bit of this. in talking to ceos behind the scenes, investors, people -- at least bullish investors would like to see some coordination, more overt coordination between the various government agencies to really stem some of this volatility and make sure that people feel more comfortable investing in bank stocks that's been the key issue over the last week and a half is there is significant pressure from the short seller side plenty of conviction on the short side the issue is there isn't enough conviction on the long side to

get people to come in and buy. so, people point to, you know, potential reforms with regard to deposit insurance as part of that some clarity on various regulations, whether it be on the antitrust side, various government -- different capital requirements jamie dimon was speaking about this this morning, urging regularities to basically say, you know, don't go too far and be thoughtful about regulating regional banks because of the risk they will curtail lending in the future. so, there are lots of different things bantying about, but the overall uncertainty is creating a lot of the volatility we're seeing right now. >> leslie, thanks. speaking of curtailing credit, what does the volatility mean for the fed? our next guest argues yesterday's lower than expected inflation report, while positive for treasuries is a negative for the markets, adding earnings estimates are far too

optimistic joining us, david rosenberg joins us on the phone. david, some people looked at the loan officer survey and said, i don't know, i mean, only a small percentage said they were seriously tightening maybe it didn't cover enough of the period post-svb. is that just the beginning of what we're going to see? >> well, actually, if you take a look at the fed loan office survey, we know they were already tightening credit conditions even before this regional banking sector mess second quarter data net-on-net, whether you're taking a look at commercial industrial loans or cre, they went to net tightening levels we've only seen in prior sessions i wouldn't exactly take complacent or sanguin approach towards the survey because it might not have gone to armageddon type levels it definitely went to levels in the past where credit conditions tightened enough to tip the economy over. >> as for earnings, the bulls

continue to look at better than expected blended growth rate, the beat ratio, the two-year guidance ratio, not too bad. i just wonder, what is your number for s&p earnings on the year and, i mean, are you in the 195 range or i - >> yeah. >> go ahead. >> maybe even lower. for the next 12 months yeah, look, i mean, it's convenient to say that earnings are beating estimates. carl, when doesn't that happen estimates, it's the game wall street has been playing since i started in the business. lower the estimates so that you can jump over the low bar and all of a sudden, voila, even though the context of an outright earnings contraction, what do you know, almost 80% of the companies are beating their estimates. i just don't know why more people don't roll their eyes over the beats what you're seeing is the estimates continue to come down, quarter on quarter on quarter for 2023 and 2024.

when i hear people talking about, like i did ten minutes, that 2024 growth on eps is going to be harder in 2023 it's only because the estimates for 2023 are coming down quicker. that's bear estimate math. the estimates for 2024 are continuing to come down. i'm -- you can call it roughly 190 for earnings and it's a matter of what recession multiple do you want to slap on that i'm not going to argue with bob ferrell, he was on my webcast a month ago saying not only is the stock market going to test the october lows before the end of this year but probably break below the lows he's bullish on 2024 i actually would be tempted to do that, too, depending how far along the recession we are and what the fed ends up doing i think like bob said, he hasn't seen this many false breakouts his entire career, what's happened over the course of the past six months. we're are in an earnings recession, full stop it's not over yet. >> david, i always enjoy your

research, but yesterday's was one of my favorites because you called me out for saying that surprisingly we're not in a recession after all the tightening i don't i think i'm alone in saying something like that or expecting something like that. you've been bearish for a while. i would argue you probably did not expect it to take this long. we pulled a quote. basically you're saying it takes a lot longer to see a recession and i should not be saying, surprise, we're not after a recession after 500 basis points of tightening. >> it's almost every debate i'm in, where's the recession, where's the recession, and i guess i've turned into an old curmudgeon doing this for so long in 1989, where's the recession and then in 2000, where's the recession? in 2007 when i was at merrill, every day, where is the recession? the only point i was trying to

make, yeah, the fed started raising rates in march of 2022 but you don't get the recession the next one, two or three months the lags are long and variable i'm just saying, look, we're not going to get -- this is a credit-driven economy. and we just came off the most pernicious fed tightening cycle since 1981, which was followed by 1982, another recession people didn't see. recessions are like this odorless gas, they catch up on you. you remember the consensus was still calling for a soft landing in the summer of 2008. the recession started, as we know with all the revisions, sara, with all the revisions we know the recession started in december of '07. >> so, here's the thing, the labor market is different. 3.4% unemployment, you can't argue with that. that's kept the consumer in good shape and it's kept a lot of things humming, including inflation. >> well, you know, the thing is that the unemployment rate, for

example, goes in the conference board's index of lagging economic indicators. if that's what you want to hang your hat on, go for it nonfarm payrolls, that's in the index of coincident indicators you see the work week, the work week by the way, initial jobless claims this was jobless claims, by the way, right now, sara, and it's not the level, it's the change, is already up 90% of the way that you typically get heading into an official mbr defined recession. it's staring us in the face. nobody talks about the work week everybody is fascinating with nonfarm payrolls but the index of aggregate hours worked, which includes hours at work and the number of bodies at work, peaked in january it's rolled over ever since then that is basically the whole kitchen sink as far as the labor market -- people don't even recognize the fact that the labor market in entirety peaked in january like the recession could be starting right now it could be the first time unemployment was this low and still going down into a

recession, hardly not. the fact it's a lagging indicator is in the opening months of the recovery, the unemployment rate is still going up you'll be saying to me in the opening months of the recovery, say, next year, is recession over because the unemployment rate is going up i'm going to say, yeah, the unemployment rate is up. the unemployment rate is really backward-looking we should be focused on is where is the unemployment rate going to be six, nine and 12 months from now i think that when you're looking at the challenger numbers, the wok week, you're looking at the jolts data, it's very clear the lagging indicator, the unemployment rate, is going to be quite a bit higher in the next 6 to 12 months. >> we're starting to see calls for negative payroll prints. maybe next time we'll talk debt ceiling and housing equity as well, david. good to see you. >> you too, guys. >> david rosenberg. when we come back, howard friedman

that stock is big this morning despite strong earnings results. we'll ask him if prices are coming down for the consumer next. bill rudin is here at post ayitus st wh new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

watching peloton as the company is recalling about 2.2 million exercise bikes over concerns of faulty seat posts. shares down, as you can see, 7%

here that's going to take you back -- it's awfully close to a multiyear low, in the 7 range on peloton. we're watching shares getting crunched on a revenue miss in q1 but highlighting gross margin growth with pricing actions. joining us in a cnbc exclusive is utz's ceo howard friedman is the consumer starting to push back you did see volume declines? >> we did see volume declines. it's good to be with you the business has been performing well over time and certainly over the last year we were not only able to grow 4% organically this year but that was on top of 20% a year ago i think the consumer is largely, as we would have expected, and a lot of what you've heard before about consumers continuing to be resilient and elasticity to be muted overall. >> but now that we are seeing

some softer volumes with, what, mid-teen price increases, does that mean we can expect more promotional activity going forward? >> what we've seen so far is that the promotional environment is pretty rational we are in a great category our competition behaves rationally what we certainly expect is there will be some promotional activity but nothing out of the ordinary and nothing that we wouldn't have expected in our annual plan. >> i just want to know food inflation is coming down, howard >> i understand. >> what's the answer >> look, i think what we know is that costs have -- costs have been elevated over the last several years. costs are still up this year as well, but we would expect in the back half of the the year as food costs come down, i don't think anyone is ready to declare deflation at this point. >> what about the consumer, you said you're relatively optimistic about what you've seen any signs of tradedown or

consumer stress across income levels we've heard about from the grocery stores >> what we see overall is, you know, salty snacks are a very affordable indulgence. we're a relatively low price point and consumers opt into the products we certainly see a little bit of private label, which is normal in this period what we do see is consumers move up and down the price ladder, everything from larger sizes to multipacks to single serve as the behavior flows, there's, again, really nothing that extraordinary that we're seeing and not a lot of consumer pushback overall. >> we keep asking a lot of consumer brands how marketing strategies shift, if, in fact, we are entering a period where at least there's a little more discernment on basket size as people go to the store >> yeah. so, i think what you'll hear from us is what we want to make sure is we have a variety of options. so, consumers will trade in and out of individual pack sizes and

absolute price points. but what's really important is making sure that we continue to meet consumer demand by driving products that consumers love, innovation and offering items that are on trend, things like our mike's hot honey partnership this summer as well as making sure we're launching new items like zap's twisted seasoned pretzel sticks consumers will continue to come in and participate in the business and participate in the category over time >> how's the competition with pepsico? obviously, much larger they've also been seeing very strong pricing and strong growth as well. does that impact you >> well, look, i think we're in a very competitive category overall and each competitor does what they need to do pepsi's obviously a formidable competitor and they have a great business we feel really good about our own business and where we are able to compete. consumers love our products. we have been growing consistly over our 100-year history and we see a lot of opportunities to

grow our overall distribution nationally and provide our consumers the items they love. >> they don't have cheeseballs. >> that's true >> if we're getting into a more defensive crouch on consumer, what happens to, like, innovation, recipe, new offerings, does that get curtailed first? >> i actually don't think so i think what you see, as the consumer becomes under more pressure, they opt into brands they love and they trust when they opt into those brands, they continue to look for variety. we're in a category where consumers look for variety and look for brands. i think innovation remains important, even in a downturn, if that would occur. i think we would find we would want to make sure we are continuing to delight and surprise our consumer and maintain a conversation with them that they can feel great about our brands, which they do today. >> coming back to the stock price, it's down almost 7%, howard so, is the market taking the volume declines the wrong way?

it doesn't sound like you're overly cautious right now. >> no. look, sara, i would tell you i feel great about our business. we delivered exactly what we expected w we were at 4% organic growth we have a long-term margin opportunity that will allow us to have fuel to reinvest back into providing the products that our consumers love i look very much at long-term shareholder value and really making sure that we continue to delight our consumers. because when they pay for our food, we want to make sure they come back, which they do today. >> and we should noted, you've had a strong year-to-date and 1 months, which could be part of the explanation today as well. howard, thank you. appreciate it. howard friedman of utz. >> have a nice day. >> you, too. the bank of england just raised rates to the highest level in 15 years. we have exclusive sound from governor bailey coming up after the break. do not miss -- do not miss our interview with the ceo of krispy kreme coming up in a few

minutes. strong guidance for the quarter as well. we're back in a moment ahhh! icy hot pro starts working instantly. with two max-strength pain relievers, so you can rise from pain like a pro. icy hot pro.

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the street." i'm bertha coombs. here's your news update. one second here. as we are trying to get the prompter working former pakistan any minister khan is expected to be released as the top court ruled his arrest was illegal this comes two days after his detention on corruption allegations ignited deadly protests and street closings with the military. ex-las vegas raiders player henry ruggs pleaded guilty to driving his sports car drunk at speeds up to 156 miles an hour on a city street before causing a fiery crash that killed a woman and her dog in 2021.

the 24-year-old is expected to be sentenced in early august to three to ten years in state prison under terms of his plea deal with prosecutors. and robinhood will soon allow users to engage in 24-hour trading on selected exchange traded funds and popular stocks such as apple and tesla. this would make the company the first u.s. brokerage to provide overnight weekday trading in individual stocks. that would be a game-changer for a lot of folks, sara back over to you. >> bertha, thank you keeping our eye on the markets, the dow is off the lows, down as low as 402 earlier. selloff across the board most sectors are lower except for consumer discretionary big tech acting defensively today. plenty of warnings on commercial real estate being the big new problem for the economy after persistent turmoil for several regional banks our next guest taking the other

side of that bet bill rudin joins us at post 9 when we come back. ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪ ♪ (upbeat music) ♪ ( ♪♪ ) constant contact's advanced automation lets you send the right message at the right time, every time. ( ♪♪ ) constant contact. helping the small stand tall.

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european markets set to close in just a few minutes with bank of england's rate hike decision driving today's action. interestingly, the pound is selling off. it's weaker against the dollar as people bet they're done joumanna bercetche just spoke with bank of england governor. first of all, how cool is it you got an interview on the date of the rate decision?

>> yes, we tend to speak to them every quarter but a great opportunity to have spoken to him today. the bank of england did hike by 25 basis points. as expected, the split on the committee was 7-2. i think what's interesting is two things first, they massively upgraded their growth forecast. they're no longer forecasting a recession. all of their growth forecast having lifted upwards, no longer having seen negative quarter for the economy in 2023. that was one major takeaway. the other element is an upgrade to their inflation forecast. that is significant because headline inflation in the uk is still running very, very hot that march print is still sitting at 10.1 percentage points and they kept a line in the statement saying they're still upside risk to their inflation forecast over the medium term. at one point in our interview i did ask the governor what they would need to see on the inflation front to remove that line >> fiscal policy the core price of the budgets since we last offered a forecast and that's

providing more support and the global economy is providing more support i think china, for instance, would be a point to there, the end of the sfwler covid policy was less, i think, disruptive than many of us feared it might be and i think fourth and finally i would say the uk economy is more resilient. employment has been more resilient than we thought it would be so, that's good. >> that was the governor talking through why they revised upwards their growth forecast. later on in the interview we did speak about their inflation forecast he said returning back to normal, it requires a little bit of assemetry in order to get back to 2 percentage points t will take more time. that's why they're being cautious for the markets to believe the bank of england is ready to pause, we need to start seeing headline inflation start dropping, which is why the next print in a couple weeks' time will be key for market watchers. >> or the economy really fall apart, right, on the other side

of things. how is that looking? because, you know, we talk to business leaders all the time and a lot of them point to weakness specifically in the uk. >> yeah. and that was why at one point in the interview i did ask him why they had upgraded their growth forecast so notably. a lot of that is just on back of the pass through of lower gas prices wholesale gas prices have started to fall quite substantially. the labor market in the uk is still very, very tight because of that, consumers do have confidence to go out and spend. so because of those things, the bank of england did feel they were in a better position to upgrade those forecasts. it should be said, these are still low forecasts. they're forecasting zero point growth for 2023. it's close to recessionary territory. >> the notes say hawkish undertones but we expect them to pause and the pound is selling off. thank you. chair powell is invited on fed day to come for an interview with us.

wouldn't that be fun >> yes. the fed's senior loan officer opinion survey shows credit standards are tightening across the board our next guest is optimistic saying he's seen pretty good opportunity in commercial despite macro headwinds. joining us bill rudin back at post 9 good to have you, bill. >> good morning. >> we were talking during the break, the polarity between residential and commercial have you ever seen them farther apart? >> not really. it's interesting to see the dynamics people are coming back into the city, apartments are renting very briskly when we get something back, and then you have the commercial sector where -- but within the commercial sectors there's two different worlds the class a world, which is doing great, tenants are upgrading and taking advantage of new buildings or renovated buildings that are amenityized

and have great infrastructure. a few blocks away, from park avenue to 1st avenue, there's a lot of vacancies. >> i did not realize you were 70% commercial real estate. >> yes >> so, what kind of pain is there as a result of the rising rates? this sector is heavily dependent on rates. >> as i said before, it's going to be in the class b sector where the pain is going to be felt it's not just new york city. it's all over the -- all over the country. and. >> so class b, worst locations, older buildings? >> older buildings, different locations. don't have the capital available to upgrade their buildings, the ceilings are smaller, a lot of columns. tenants want that newer look and feel so they can get their employees back into the building and you were talking about what's going on in england and interest rates we're going to have to figure out a plan with the federal government, the fdic, the federal reserve to allow banks to have some time to work

through some of these loans. and it's been done before. so, you can restructure, get more equity into the deal and so that we don't see this cascade of defaults that we've already started seeing happening there's a trillion and a half dollars of debt coming due in the next three years so, you know, there's got to be some thought to give banks and owners and developers time to restructure loans if they get into that kind of problem. >> do people ask you what the difference is -- what accounts for the difference between, say, new york and san francisco is it about return to work is it about crime? is it about the length of commutes, something else >> i think it's a combination of thinks but it's also -- san francisco is sort of a one industry town. new york city has a diversified economy. we have financial service, we have media, we have technology, we have health care, bioscience.

that's helping us get through this and i think we have a great leadership in the city and the state. the mayor and governor focusing on getting -- you and i talk about crime all the time and the trends are significantly down. and we just passed -- or the governor and legislator just passed some changes in the bail reform laws. so, there's a concerted effort to understand what needs to be done to make sure our city stays at the top of its game we signed a huge deal with citadel to build their new york headquarters along with our partners - >> which is interesting because they're doing so much in florida. >> vornado and citadel to build a 7,000-foot building a couple blocks north of jpmorgan's new headquarters that's a huge sign and positive signal that new york is moving forward and we're coming back out of the covid fog that we

went through the last three years. >> and you're not seeing any weakness on the residential? >> we have not seen any weakness on residential the condo market and co-op market is relatively strong. there are significant sales going on, that fear that everybody was moving out of new york city during covid, people are coming back, the restaurants are filled, theaters are booked. you walk along times square and it's packed. i was just sitting outside before i got here and you see baby carriages being strolled and dogs being walked. 30 years ago you wouldn't see that that's what we need to do in midtown to deal with the office buildings that are not attracting tenants we need to allow them to be converted to get them back into a productive way we have a huge housing shortage in the city, across the country, every community has significant housing issues we need to get that. we have the ability to create

thousands and thousands of units without tearing down buildings, reduce carbon emission and provide better housing on all levels, affordable, middle income, workforce housing. so, those are things that -- public/private sector need to come together. >> you're not a believer that not only is it impossible to get the zoning changed but just to reconstruct an office building into a residential condo building given the size of the rooms and you need window space. is it not a heavy lift >> it is a heavy lift. we need the city to create incentives, allow zoning to be changed. but there will be capital and demand if those things happen because people want to walk to work they want to have proximity to all the infrastructures and all the restaurants and the theater and the stores that are, you know, predominantly all over the city but in midtown, there are

buildings that are ready, ripe at the right price at the right structure. not every building could do it but there are a significant amount of buildings it can be done. >> i feel better about the whole real estate market hearing from you. i know residential, good commercial, mostly good, it sounds like, from your perspective? >> no, there are definitely issues there are definitely issues. but there are people who are taking advantage of the price differential and upgrading we're also seeing capital come back in. we're seeing people who couldn't afford to buy a building two or three years ago looking at opportunities at a lower price point to come back in. >> my next question is, the distress part that you are seeing, the defaults could it cause a bigger economic problem? >> no question about it. that's why we need to come up with a regulatory framework that will allow both the banks and the owners time to figure out how to restructure these deals

it's about time. it's about getting us through to the point where the pause happens on interest rates and the rates start coming down. rates were too low for too long. >> isn't that where private credit is coming in? >> yes but there's 1$1.5 trillion. private credit isn't going to solve all the issues you saw today blackstone making a deal with regional banks to take some of their loans off their books that will allow them to reinvest in new deals 65% of the -- of commercial loans are in regional banks. they're an important part of the system, of the liquidity system. right now it's definitely frozen we have to figure out ways to unfreed that. >> that's a good gut check, bill thanks for coming in. >> okay. softbank leaning into ai as they report a $32 million loss we continue to track

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softbank with new numbers overnight that reveal yet another difficult quarter and year for its tech investments. for that let's get to deirdre bosa for another "techcheck." >> $39 billion in annual investment losses at the vision

funds. even as public holdings like commerce and china's didi rebounded. losses at private startups were bigger than expected that has left softbank, one of the most prolific venture capitalists on the defense looking to the arm ipo for liquidity. this is coming just as the venture world is leaning into the biggest platform shift in decades. generative ai, of course massa son no longer joins the earnings calls thinking about ai, but softbank cfo echoed masa's vision for ai. saying, solid defense is now in place and we are getting ready to go on the offense he questioned, though, has the horizon already come and gone? is softbank too late some vcs i speak to regularly

say there's already a bubble forming in ai and softbank has largely sat out the last quarter. it didn't crack the top 20 in the most active or spendiest lead investors in 2021 that was peak unicorn era. it and tiger global, they were constantly at the top of those lists, but they have fallen off in a remarkable way so far this year just as that ai boom is getting under way. >> so, do we know what the ai plays are for them, what the strategy is, or is it just something they're talking about generally? >> it is something they've talked about for a long time generally. and they've been talking ai for years. but if you remember when softbank made many of its huge investments, uber, wework, et cetera, these were late-stage rounds so, they were getting in, now we know, at the top obviously they thought it would go higher in public markets but that hasn't been the case. now the risk is that softbank gets in at the later rounds in

this ai boom and maybe the valuation doesn't necessarily stay that high we don't know. maybe they think that ai is so revolutionary, so different that valuations are going to go higher and higher. as i said, some other vcs in the bay area think they're getting a little rich. you have billion dollar valuations for companies with zero revenue. >> thanks for that important story, watching softbank. meantime, we are watching the nasdaq as well has just gone positive led by some pretty good performing names like jd, alphabet, micron's up there, amazon, too maybe a comment if rates do give us some relief here, does tech become the trade. >> paypal has been acting as well after selloff postearnings. big tech has been acting defensive. it might be part the ai story and maybe just the environment we're in where the cyclical groups tied to economy, energy, material, financials and industrials are selling off. >> alphabet's year-to-date gains

surpassed microsoft. be gkrispy kreme has surged, and upatuidance driving the move the ceo joins us next. go. go brain. no, not that one. go this one. go optimizing data. go efficiency. go results. emerson's plantweb digital ecosystem is the brain for smarter, safer and more sustainable performance. go plant go. go boldly. emerson. (cecily) you're looking pleased with yourself. (seth) not to brag, safer and more sustainable performance. but i just switched to verizon. (cecily) so you got an awesome network... (seth) and when i switched, i got to choose the phone i wanted. for free. not bragging. (cecily) you're bragging.

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welcome back take a look at sonos, deep in the red as the cup cuts

full-year guidance they say macro factors are pressuring the home theater category and have observed competitors getting more promotional. that's going to basically wipe out your gains for the year-to-date and then some. >> down now 4% for the year. one area consumers are area cutting back, doughnuts. krispy kreme delivering a beat across the board in q1 it's not just the physical stores, the company calling their best-ever quarter for e-commerce revenue joining us is krispy kreme ceo michael, it's great to see you so what is driving the growth right now? >> first off, good afternoon, sara, carl nice to see you and meet you i think the biggest driver of growth is we've transformed the company which takes our 400 producing doughnut shops and then we deliver fresh doughnuts every single day to now up to

12,400 points of access, and those are primarily grocery stores or convenience stores, continuing to open up new channels in that space, but it's really that movement, and it's been always the challenge of krispy kreme customers are trying to -- how do we get more access to you? this shifts to the fresh and we do that in 32 countries every day. >> insomnia cookies has been a big driver in the u.s. the e-commerce numbers as well >> e-commerce is also driven by right before the pandemic hit krispy kreme was at one point almost negligent zero and now we're 20% of retail sales. one of the partners in e-commerce which is about a 50% e-commerce business start that had way in college and the university of pennsylvania, and they just continue to accelerate e-commerce and driving delivery as they've done an added more

distance to delivery zones and has been a significant factor. >> you've been talking a lot about moderating inflation, but i have to ask you about sugar and just what is going on. some of these charts on sugar are out of control >> our main three ingredients are twwheat, sugar and palm oil. what that means for us, those three are about 10% of the retail sales piece it's not a significant number, sugar is we have hedged wheat and we have hedged our palm oil. we have not hedged sugar but we're locked in hedge for the year we can offset that with some of our other ingredients. it's pretty unique >> i'm curious, michael, how the mcdonald's partnership is going. i know they're testing it and expanding tests in kentucky to over 100 locations where they're

selling your doughnuts how does that look >> we went from a simple plan of our hub and spoke system, how do you get to 75,000 points of access different channels are going to play in that and one was mcdonald's from a nine-store test in the latter part of the year and now we're in lexington and kentucky with almost about 170 store test what's really interesting about it, it works with how we do our daily fresh delivered whether to the grocery store, whether to the convenience store. we can put the same routes with the franchise system in mcdonald's and then they have a different approach they might have a different pack size but the same logistic route to be used, and we're delivering fresh to them. so it works really well operationally for us >> it's interesting you bring up mcdonald's in the breakfast part of the day, it may not be the same for you, it's considered a bit of a proxy for employment in america at least because if you're on your way somewhere, ostensibly for work, you have to stop

i wonder if a dynamic that fits krispy kreme and, if so, if you're worried about jobless claims ticking up and what that might mean for the back half >> pretty interesting. i think you had two questions in there. we're a low frequency business, so our customer visits us three times a year they tend to use us -- we sell dozens, and it's really half the time our doughnuts are shared in the dozens and about 40% are gifted when we look at channels such as a qsr, the need states a little different, right if we can continue to use our logistics route to do that, that opens up a different customer that's using our brand a little differently than they might in other occasions. that's why we like the qsr business, and it works and we can see -- by the way, mcdonald's some are open 24 hours. people have doughnuts at different times of the day as well >> what happens during recessions how much of an added indulgence are doughnuts?

>> when you think about it, we've been born in the depression, right, able to manage that through -- when you think of the price of a doughnut in a global business, it's a little over a dollar per doughnut, so we're very resilient, and then we just continue to make sure the pretty unique partnerships with cookies from england and we put in the u.s. or a global hershey partnership and have interesting things either at halloween or mother's day, some cute little mother's flowers coming in doughnuts. as a gift, as a treat, people will continue to look for that, and so when you're still affordable and we have pricing power, but we're really thoughtful about how we do that. >> have you seen the line outside the midtown krispy kreme? >> i haven't it's a thing >> it's hard to get in >> i think i prefer doughnuts to flowers this year, michael >> i think i know a guy who

might be able to help you out. >> i think the merch, too. you should sell more of that michael, thank you >> i really appreciate it. and thanks to all the krispy kreme-rs around the world. >> this hulu hoola-hoop, stay with us.

wall street is buzzing about this drop in disney plus subs this quarter eps roughly in line, streaming losses did narrow but earlier this week disney ceo bob iger continued to take aim at florida governor desantis accusing the state of a retribution campaign over the company's outspoken stance to the so-called don't say gay bill, the stock not reacting well maybe in part because of the guidance on second half margins for the parks where revenue was up 17 and we know it's been a bright spot given the operating leverage >> it's the ads down 15% andth streaming subscribers partly on the back of the increased pricing on the streaming business that wall street is fretting about, only its worst day since november disney has had bad days. in about six months now bob iger

has returned jim cramer, i know, urges patience analysts stay with their buy ratings but take down their numbers today and that's the story. >> and they're not the only ones, paramount with new 52-week lows after that head count reduction. >> comcast is up, our parent company. disney making a play for hulu, incorporating it with disney plus >> but holding 4127. to "the half." carl, thank you very much. welcome to "the halftime report." i'm scott wapner front and center this hour today's sell-off has a host of concerns weigh on the major averages we'll discuss them with the investment committee joining me for the hour josh brown, bryn talkington, jason snipe and amy raskin the dow was down by a touch more than 400 earlier, paired the losses the nasdaq is getting a little bit of a lift today. bryn, i turn to you. ppi was pretty good, but you