Skip to main content
Internet Archive's 25th Anniversary Logo

tv   Squawk on the Street  CNBC  May 21, 2021 9:00am-11:00am EDT

9:00 am
. welcome to "squawk on the street." i'm david faber. i'm just talking to you. >> how have you been >> i'm okay. >> that was pretty cool. joe was pretty cool. >> the road map this morning starts with wall street's wild week major averages set to continue to claw back the week's losses crypto trading, for a second straight day plus the biden administration, it proposes a local minimum
9:01 am
corporate tax that they want to be at least 15%, and bank of america -- >> stock sales could be coming we're off to a bit of a technologically tough start here >> we're ending an interesting week for the market and i would love your perspective on that, you know, we may actually end up for a week that at certain points certainly didn't look to be a good one for those who were long. >> i want to be harsh for a second. >> okay. >> there's unbridled enthusiasm in the actual stocks and unbridled negativity in the commentary about stocks, because it's overshadowed by crypto, as if somehow crypto is in charge of the stock market. i think that linkage is going to end soon. >> you do? >> i think we're going to go back to reaffirm what we heard
9:02 am
from companies whether it be a home depot that announces a gigantic buyback yesterday. whether it be a lowe's that actually reported an amazing quarter. whether it be a walmart which had a quarter that was so much better than people thought target which was probably perfect. we got to go back to these big companies and got to get away from the idea that there was a 30% decline in something, that by the way barry diller called it con, it should fall to everything else. >> it was interesting to diller who always speaks his mind saying that, in terms of crypto. why is there going to be a dividing line between the movement of crypto and that of the broader stock market in your opinion. >> i think because of some of the things wegot from gensler and the fed and i am sure yell en is about to weigh in and we talked about the systemic risk, by saying, look, we got to
9:03 am
figure out what's going on here now. there is way too much lev reg, leverage in the crypto world and by the way, the rate that you're getting if you have your money in some of these darker institutions, is so high, that if i were the fed, i would call them and say guys, what are you doing? getting 5% who is paying you that 5%? one of my guys is doing it. >> what are they doing with your money? >> beats the heck out of me. now is that good if jamie dimon, don't you just say, you know what, i wish the fed would make a phone call, and now jamie says it's too small, i don't know, they're not worried, i'm worried about it, i'm worried about it because david the younger people who are involved with this, i keep getting this, i was thinking that jj yesterday, from td, this is what they want to talk about, the younger people, this is what they're in, david, they're not
9:04 am
buying -- well they will say wait a second, jim, did you see robinhood, the main stock is ge and ge just won a big order for air fair that's not the point crypto is without a doubt david, catching what younger people are doing with their capital now, brian moynihan said last night that there is a great thing happening, which is that there's a lot of saving and a lot of spending which is kind of nirvana, but we have got to get away from bitcoin, coin metrics, and just have someone like gensler who is very critical in 2002 of the mutual fund industry and the brokerage industry, to say look, all he has to do is come on, we call him up right now and we say, gary, what you are thinking, and he's like i'm not happy with what's going on and that's it and then we're back talking about how apple is doing with the lawsuit. >> we will talk about that and talk about at&t for obvious reasons. we will talk about deere earnings this morning. and anything else you want to
9:05 am
talk about stock-related very important that's what we like to do. >> as for gensler, he does have his plate full you're looking at a picture of him right now. >> i have a blue plate special. >> dealing with gamestop still dealing with archegos. >> gamestop? that was resolved. >> and swaps still dealing with whether there is going to be true new regulation around spacs of some kind in terms of the recent projections. and dealing with crypto. so plenty. plenty over there that they have to deal with. >> all he has to do is say look, i don't know if you're in the crypto company, you're getting 5% interest, that may not be sustainable and boom and finally get to the bottom of some of this by the way, can i tell you, you within to get back to the old days, you want to get back to the old days >> let's do it. >> nvidia four for one split remember that? pepsico would split. coca-cola would split.
9:06 am
and stocks would jump. >> i remember the mid to late 90s where a split was announced and it would be greeted as though it was somehow something positive for the company, and it's not >> i used to go with the late mr. tish - >> i remember yahoo did a split and it went up 30%. >> i went in to see him and i think shoe buy pepsi, and why, and pepsico, every stock that goes to 90, it goes to 100 why should i buy it? it's 90 and it goes to 100 and he asks me back, it goes to 100. and he says what's next. 100, goes to 120 and at the end of it, he says tell me what to buy. that's this market nvidia jumps 3.9% on a four for one split. not on a completion of the arm holding deal not on the quarter which is about to happen. not on the ethereum chips cars that they're using but on a four-point split >> we'll make it, it will make the stock more affordable to buy a share. >> you can buy fractional
9:07 am
shares. >> you can. >> and a notable text about that, in 90 seconds. >> and alpha, 356 and amazon 3,247. they don't seem to be bothered by the idea of having a split. apple of course did. >> yes i know. at&t tries to do a split >> they split the dividend >> all right well you know what, since you mentioned it, let's move on to at&t. >> it is a segue for you, partner. >> it receive a pair of wall street upgrades this morning in fact and we'll get to those. but last night, jim did make a different kind of call on the company. take a listen. >> tonight we're talking about something i rarely used in 16 years of "mad money. and it's called the wall of shame. honestly, i should put at&t's entire board of directors on the wall but they still have a chance to claw back some of
9:08 am
stephenson's compensation so let's see what they do. >> all right you had stankey on the wall, too. that's the part i wonder about because you know, jim, you can make, certainly make a very cogent argument for why stephenson perhaps deserves that but stankey? bold moves in a short amount of time that he believes are trying to position the company for a future that he sees. >> he made assurances about the dividend you don't do that. >> you don't have to >> that'swhat you have been very focused on. >> because the people thought -- >> a personal affront. >> the people who own at&t, for the large part, own it for the dividend. >> yeah. >> we can go on and on i've actually spoken, i am going to rest my case on this one, because i'm ready to move on but i do have a warning to people, david, who are watching so that ceos, don't do that, don't assure your dividend to me, and then -
9:09 am
>> well, i think they've got than message. >> good. >> listen, when you take a look at 20-year on at&t, that tells the overall story. there's the one week. >> holy cow. >> it is down. 20-year is a better view it's up. >> it's singularly the worst company. >> singularly. >> singularly. that was a joke. >> there's, how many years is that >> yeah. >> it gets right back to where it started like that song. >> ge looks a lot worse than that >> i had a talk with jeff. >> yes. >> but we do have -- >> and twitter saying why don't you call jim immelt. you know how hard it is to do this stuff >> it is. >> it is doctoring what diller's comments are do we have that? we can take a listen to diller and how he viewed the deal >> yes. >> the great escape for time-warner, i mean for at&t, a remarkable thing, you know, it's the thing you think about it,
9:10 am
it's the power of moan pole mo knolly, people say discovery bought it, no, at&t basically bought discovery, at&t shareholders but discovery management, the scrappy mr. zaslav gets to operate it. >> that stock actually has had a rough week, as has our parent company comcast, as has charter. both of those bound in part because they do believe there was going to be more flexible, more competitive at&t and the wireless/connect tive industry and behind the notes this morning, ubs talking about, listen, none of them seem to believe they will necessarily get to the 20 billion free cash flow target at at&t. but the analysts are coming out positive today on the stock, don't seem to care that much for its part do we have that ubs? they talk about, they're just going to be more competitive in the wireless industry. that's what they come back to. they say while cable continues to grow as a force in wireless and competition from wireless
9:11 am
and t-mobile will ebb and flow, we believe at&t will improve its positioning relative to expectations in the 5g era as it accelerates the rollout of its c-band, and spent an enormous amount of money on air waves and news street, we don't believe the guidance but it doesn't matter, we don't have the company growing free cash flow in the mid single digit range, and we don't have them generating 20 billion in free cash flow. we don't think it matters. for two reasons. first, the market doesn't buy the guidance either. and second, even with a much lower free cash flow of let's say 15, they have plenty of cash to pay an $8.3 billion dividend while paying down debt so we'll keep an eye on those shares which you saw have been off this week. you said your part >> i don't need to say anymore i think people know that what i stand for is hopefully understanding people who buy a stock in order to get fixed income, and have been reassured that it's fine, and the reassurance is missing
9:12 am
>> david, if you put up a five-year chart on t-mobile, surprising the guys in the control room, but take a look at that, i think you will see what you want to see, this is the money, if you had spent it on wireless, rather than spend it on entertainment, t-mobile's chart. >> right >> that's wireless spend >> and don't forget of course, it was at&t that helped put t-mobile in business in a sense. and much more competitive and more robust ability to offer, more robust wireless service >> but which would you rather be in >> transferring money to the company when of course there were attempts to acquire the company were shut down by the regulators and that's also part of the story for at&t they got shut down when they did try to grow in wireless and then they also had another year of review added on for when they tried to buy time warner to close the deal. >> david, you were there when they were upping time-warner we were together and we were somewhat aghast that
9:13 am
they just -- but jeff is what you want jeff was determined to get the best price for his shareholders and he did >> and he did. and it's a good way to deal with at&t and a good job for direct tv and all that said, i think we may disagree, i think the jury is still out, you may have to take him down at some point. we'll see. >> i took zelnik down. i took the former ceo of walmart down you can come off the wall. >> who did you have up there >> meed. >> you had scott. >> a good man. >> history for the wall of shame. coming up, the treasury department is urging the world to get on board with the global minimum tax proposal we will fill you in on that. and looking at futures as we get ready for an opening bell to end a pretty volatile week we'll be right back.
9:14 am
9:15 am
9:16 am
which shows will you be getting into tonight? how 'bout all of them. netflix. 'cause xfinity gets you really into your shows. when one burns for someone who does not feel the same. daphne, let's switch. from live tv to sports on the go. felix at the finish! you can even watch your dvr from anywhere. okay, that's just showing off. you get all of this on x1. so go on, get really into your shows. you need a breath mint. xfinity. it's a way better way to watch. welcome back jim, i want to talk to you about apple, with a trial moving into an important phase tim cook going to i believe going to take the stand and barry diller having some comments that we may get ready for you as well in terms of his view of that 30% take. i mean there's a lot at stake here for the company, is it not? >> look, the service revenue is
9:17 am
largely based on, they could be doing other sources of revenue but when you back up your pictures, very important, and david, look, i was someone who i ran, i helped run a company, the whole issue is do we go into apple, and put our subscriptions on the app store, or do we try to do it ourselves david, if you try to do it yourself, which is what we don't talk about, you're going to lose put it on the app store, you let them take their cut, and you succeed. it's cut and dry and it really bothers me endlessly when i hear what a hijacking apple's doing when you just try to do it yourself they give you the forum. is that worth 30%? i can tell you, chapter and verse, it's worth more than that and it's nice that they let you have - >> really? >> you completely developed everything having to do -- >> i developed apps, i do everything i can to try to get a subscription going unless you give them what they
9:18 am
want, look, david, 70% of something is better than 100% of nothing. >> correct but should they have that much control? >> well, what should they say? should they say listen, we've been talking about you, we really like you, we should only, we will take 15% hey, listen, they could take 50%. now obviously that would be gouging and i think someone else would come in, but i always felt the problem wasn't them, it was like why can't i get that from google why doesn't amazon open a competitive store? they have a lot of stores. they opened whole foods why can't they open an app store what is going on that no one will go against them it's not that they have a monopoly, it's just no one competes david, this isn't like the railroad, ksu where there is no parallel track anybody can open an app store and beat them if they just decide - >> beat them, it's an install
9:19 am
base. >> the install base, the best product in the world, should they not be rewarded if you - >> an interesting question should they be rewarded to that extent that they basically have control over whether you live or die. >> david, it's not live or die. >> so to speak, as a business. >> that is, i think that's hyperbole. now, barry diller -- >> if that were me. >> that means some -- barry diller called them criminals and i just think that was hyperbole, he did not mean to do that in the sense of - >> how do you know he didn't mean to do that? >> barry diller, he is a smart guy. >> he is one of the few -- >> that's why i love him one of the reasons why i love him. but i think the paul, to call tim cook a criminal is probably ill-advised. did he call him a criminal or did he just say it was criminal? >> it's criminal. >> unfortunately, we won't get it for you but we haven't been able to cut that. >> the number of people in the audience who were watching who have developed an app that want
9:20 am
to get attention is probably small. but there are two million people who have been able to blossom and have businesses because of the app store. >> if apple loses this case, does the stock suffer? >> yes. >> it does >> yes absolutely you got to take note of that. >> and do you like it at 128, let's call it? >> yes, because it's a very inexpensive stock over 2022 numbers particularly if we're starting to get the numbers that ubs is saying, and i mentioned this, like csi, i like this, and what you're saying if there is a strong demand, i'm not saying super cycle but strong demand for 12, david, then the numbers are too low. and people are saying why i'm not going to buy apple and tony who often thinks that apple is too high. >> he's a rigorous guy he makes decent arguments. he hasn't necessarily been right over a longer period of time the stock is up 60% over the last year. although it is still down 2% this year. >> do you want me to do, i
9:21 am
studied with a jesuit professor, i can argue both things, it's much too expensive, david, let me tell you why it's too cheap. >> we can do that. that's what we do here. tech check, don't miss it, an exclusive with microsoft ceo satya nadella, 11:00 a.m., he will be on the program. coming up next, it's cramer's "mad dash." dot awhe.n'gonyer ♪ ♪ ♪ ♪ ♪
9:22 am
the pursuit is on. the pursuit of outperformance at pgim. with deep expertise to outthink across multiple asset classes, actively managing investments in the world's public and private markets. outscale, with the resources to serve 1,500 clients in 52 countries. and outlast, with long-term conviction that looks beyond today's volatility. join the pursuit of outperformance at pgim. the investment management business of prudential.
9:23 am
six and a half minutes before we get started with the final day of trading, you want it talk a lot about applied materials lately, again, why >> largest semiconductor capital equipment, we have a
9:24 am
semiconductor shortage and applied materialsdid not give us hope that it will happen but they said that business is very strong and it looks like they won't expand production of machines that make d-rams which is very good for micron because it keeps the supply a little tighter but they did say they are going to really burst production of flash, and in the end, david, what they did was a good quarter and it's not been enough in semiconductor land to do a good quarter. you need to do a blowout quarter. i think we will circle back to this company in a few weeks and buy it and maybe next week. it was a good quarter. the instant analysis is often wrong in the semiconductor world. >> i feel so often when we stand here during this segment, we look at a stock that perhaps is not responding in a positive way to what you call positive news >> right. >> but then you look in the corner and say it is up 136% or up 200% or it's up, these stocks have had such amazing moves. >> this is all about 2022 now.
9:25 am
>> right. >> and i thought applied materials gave you a very good outlook in 202 i would say this was all because of how great 2021, they thought, would be and it was. and now the stock has been going down because people feel like 2022 could be weaker but the company assured that's not going to be the case and that's because of the general use of semiconductors in so many different things >> okay, we will come back and there's a story about boeing raising production of the 737 max. i thought they had too many 737 maxs >> we'll look at that as well and we have an opening bell a few minutes from now a lot more "squawk on the street," we're coming right back
9:26 am
9:27 am
(vo) nobody dreams in conventional thinking. it didn't get us to the moon. it doesn't ring the bell on wall street. or disrupt the status quo. t-mobile for business uses unconventional thinking to help you realize new possibilities. like our new work from anywhere solutions, so your teams can collaborate almost anywhere. plus customer experience that finds solutions in the moment. ...and first-class benefits, like 5g with every plan. network, support and value without any tradeoffs. that's t-mobile for business.
9:28 am
i would listen to jc, your man jim cramer and what he's trying to say, to try to create some awareness around the speculative nature i guess the message to investors is, you know, use your horizon to your advantage, are you really, do you really have a venture plen tality? because you need it to ride out volatility and to place bets on companies that in some sectors, nine out of ten, will never work. >> that was morgan stanley adam
9:29 am
jonas giving a thumbs up of course yesterday to jim. and a conversation we've had many times. >> have you ever seen the work he does? >> yes, i have. >> did you watch the hour-long quantumscape presentation he did? >> i did not >> it's breath-taking. >> yeah? >> it's breath-taking, in that you understand that this is basically a crazy biotech, so to speak, not crazy, a very, very speculative biotech. >> and we've made that point >> but he's an analyst and willing to say that. he's saying listen, quantumscape, it's not gm, please, understand what you're taking on when you buy -- and i don't mean to pick on quantumscape. >> we use it a lot they had a billion dollar value. and $132 a share so it is down dramatically >> when he says, what he says to you basically is if you want it stake a long-term view, look, cathie wood does the same thing, but she doesn't, but she makes
9:30 am
what i regard as outrageous projections, and he's just saying - >> she did on tesla and then they all came true. >> so everything she does it right? >> no, of course not but she did get that one right and it was a big one >> well, that's true i think that people who rush to be in her fund may so far be disappointed >> and there is the opening bell of course, at the new york stock exchange and at the nasdaq, here is a look at the realtime exchange right where we, are remember when i used to say back at history q, i haven't had to say, hg, i haven't had to say that >> to the nyse, david. >> and we will get back there. >> and get back on the subway like the old days. >> i took it twice yesterday things are picking up. even midtown yesterday even midtown. >> men in suits. >> better than men in tights >> it's impossible to get a reservation at restaurants. >> and tourists, come to new york
9:31 am
it is the most exciting -- i was down in the village. >> midtown all the way to the village for dinner >> and people were in line to go to places. >> tourists must come here it is roaring '20s it's the most fighting place on earth right now. >> it is rocking and we will be back at the nyse and i had to take the subway home at 11:30 at night because i couldn't get a cab. >> the f train >> you know what, it took nine minutes. so sometimes it works really well. >> i'm sorry to be such an evangelist for new york, but i can't recall when i've seen it this exciting. i went to a bar last night, i had to go look at it - >> and you got your places back open. >> you can't even get a reservation at places. it was like i was worried that it would just be like me with a sandwich board on. shop at jim's. >> let's get back to stocks this morning. let's finish the conversation we were having about which we've had many times playing off of what jonas was saying, we have made it clear many of these are
9:32 am
speculative company, the ones who have come public through spac in particular, projections on '26 revenues and multiples and many to be fair have come down dramatically. >> yes >> the one we go to so often, and even cciv, squaunquantumsca have come down, flying cars, have come down dramatically. >> romeo power. >> yes, all of them have gotten hit. >> and so it's going to be years until they prove out there's a look at lucent or what will soon be called lucent >> i took a drive, a fantastic car but you know who has good cars and trucks. >> ford. >> that's not a spac. >> no. >> that's a company. >> a company >> a day or two removed from the f-150 lightning introduction. >> the ford meetings, they have to talk about commodity prices and have to talk about synergies. and those are both the bane of existence of most of america
9:33 am
unless you're john deere, because you can pass things on because you have high quality equipment and very few competitors and tiedeere had a great quarter and not reacting at all. >> not reacting at all >> the numbers are up. >> construction is up. they very much need construction the biggest, the stock that is up the most is nvidia. four for one >> yeah, that's not a good thing. >> no. >> it's up 3%. nvidia, on that four for one. >> your at&t - >> my at&t - >> you defend it. >> you know, you try to give both sides you try to give both sides there is a possibility, listen, comcast and charter went down this week in part because there is a belief that at&t will become a more nimble, flexible competitor and have a capital structure that will allow it to do so. that's why it went down. maybe comcast went down for other reasons because people are worried brian will do something which i don't believe he will. >> why do you use the first names for moguls >> brian roberts
9:34 am
>> okay, thank you >> the chairman. ceo. >> wait, i know that i am saying one of the things that i don't like about this industry is everyone needs scale, and then everyone is like - >> everybody's first name. >> and everybody plays barry barry. >> we know who barry is. >> we don't know who bob is anymore because it could be -- >> we heard some interesting things about whatbarry diller had said, about disenfranchising, bob ageiger, o is not the chairman anymore. >> leaving the company at the end of the year, going on i'm sure to do some very interesting things, unclear what those will be, but this is bob chapik's disney now bob eiger built it, largely through successful acquisitions. >> and many of people would say they overpaid for, i don't want to get into an argument about it right now but they paid a lot there, that said direct to consumer was everything. and the pivot they did there was
9:35 am
incredible and we will never forget that august day, i don't remember when it was, when the espn numbers and everybody was like what was going to happen and they made it happen. >> david, i want it talk about something that has been bothering me about disney. >> okay. >> disney plus is now the same place that espn is, in other words disney plus numbers don't come out great, then the stock goes down. the stock is punished. >> it's what the stock trades. >> and that's ridiculous there are many different universes of disney and they're all coming back and to key in on disney plus is to ignore the lucrative nature of the theme parks, is to ignore what i regard as being entertainment, that people will pay for, i'm not saying that movies will come back but i'm saying if anybody can start doing a lot of production, it's going to be them and i just think to judge disney just on that is to have people who watch our show sell it, and
9:36 am
that, we don't want. because it's a very good franchise. much better than the stock right now is indicating. just hanging, entirely on disney plus. >> that's the key metric that investors are focused on but you could make an argument you're paying a fairly hefty multiple this company added a lot of debt as well to the balance sheet as it had to do to fight through the pandemic a year ago at this time and they get a lot of benefit from - >> markets will reward it based on the expectation of the continued significant growth in disney plus. >> disney and bow having excellent cfos who realized what they needed to do was make sure they had enough money to get through the pandemic. >> right. >> and they did that and that is a feat we don't congratulate cfos for doing things, because they are behind the scenes. but the idea that those two companies inthe midst of the pandemic got their debt balance sheets - >> they did what they had to do in terms of raising money. >> i salute them. >> we talk about boeing's successful bond offering, and it may be a year ago already, about
9:37 am
25, maybe it's more now, 25 billion. and it turned, it's interesting, that turned a lot of things, when they were able to access 25 billion. >> it was a sunday night deal. i wish people understood, you have always been so good about the capital structure and you knew when bowing did that deal sunday night that that was going to be the beginning of the end of the nightmare of who was going to go un is wasn't carnival cruise. and it wasn't royal caribbean. it was boeing and it was disney. >> right. >> those companies came through with flying colors and boeing is expanding. >> and you know what, it's a reuters report, citing sources that said boeing said to discuss increasing 737 max output to as many as 42 planes per month, by late 2022. so that is via reuters >> trying to confirm it. >> and trying to reach a max out of 26 planes a month by the end of this year and reach a target of 31 per month by march of
9:38 am
2022 and that may have boeing up a bit, that headline. >> that's really important and let me tell you why. >> that's reuters. >> there are so many maxes on the tarmac, that's very good i want to check that story more, because it should be moving a lot of different stocks, and that is certainly contrary to what i'd expect and i don't necessarily want people to buy it on that, but that is very, very positive, rate count moving up a little too, that's an impact, that would be amazing, that would be truly a sign as to what barry diller said, he had so many great things to say, congratulations to andrew and an amazing interview, because he said travel is going to boom and he said, david, much to your chagrin, that business travel is going to come back >> you sound like i don't want is to. i'm not saying that. i still continue to believe that there is a question mark as to whether business travel will ever equate what it had in 2019. >> well, barry diller -- >> and going - >> say it again. >> he crossed out the question mark and put an exclamation
9:39 am
mark. >> he does have properties >> he does >> and sometimes we don't talk about what a good job diller has done he's not an empire builder. >> an empire spinner-offer. >> and he has created a great deal of value by incubating companies and sending them out into the world which is worth noting he also did have those comments, i think we've got them for you now on apple and take a listen to what diller had to say about of course, the dispute right now between apple and epic that is in court, tim cook soon to testify. >> overcharge in a disgusting manner if you go through let's call it the equivalent of an app store credit card, the transmission cost is about 2% that's what credit card companies cost for putting that up whole system and doing all that stuff that's what they charge. to the person, to the producer, let's say. here, app, apple, says oh, no, 30%. 30%. i mean it's criminal
9:40 am
well, it's not criminal. >> let me ask you this - >> it will be criminal >> well, it's not, it's not, but it might be. >> devastating devastating what he said again -- >> it's not his decision to make here, so he has an opinion like everybody else. >> no, there isn't anyone, look, when i said, listen, we should use, put it on the app store, the blowback, the people in the room were just aghast, are you going to let that gouger take so much and i keep coming back and saying, two million people, two million little businesses have started on the app, the app store, and isn't that more important than behemoths who need to get, you know, it isn't like, david, that epic has no profit >> no. >> not at all. "fortnite. they have a good amount of profit spotify as well. >> rich people, because they have the ability to do it, and
9:41 am
others don't. >> well i just think that small jobs are what matter small and medium-sized businesses, i will defend them not these big companies who have even heft yer, heft yer eps, because they want to be beat wall street numbers. >> okay. >> and make huge amounts of money. versus little guys who are trying to become something scrappy and good see, david, that's called the american way, versus the cut-ocarcy, that's an interesting road that we won't get down. >> why >> because we have to get to bob pisani. >> during the heyday - >> i was not a lender. >> let's get to bob pisani, we have an appear that is up 0.55%, bob. interesting week >> yes, in fact, it has been a very important week, volatile
9:42 am
but important. so we got a nice start to the day, three to one, advancing to declining stocks, and the story for the week, on the macro front, on the investing front, grows back, boy, semis have had a great week, with good news from applied materials, semiconductor business up, ficely this week -- nicely this week, tech is up nicely and cyclicals/value, it is down to the energy, banks, down for the week and you see up a little bit here this is an important week. why is that? because the fed indicated this he had people out who want to start talking about the tapering at least talking and that's good enough for the market just that they're having the discussion, and some people are talking about it, talking about talking about, that's good enough and look what happened to the stock bharkt this week we're flat on the s&p. the 10-year yield is flat, 1.61, and the vix has gone from 19 to 20, 5%, not statistically significant folks. what has happened in the market this week?
9:43 am
nothing. nobody has freaked out because some people in the fed want to talk about, talk about tapering. that's good news and there is a bull/bear debate that always goes on but the bear case, peak everything, this is the peak reopening, the peak economic data, this is the peak earnings growth, it's peak everything, never going to get any better than this in our life time, and forget about more advances here's the bull argument the bull argument is the fed's going to win the fed communication on tapering and rate hikes will be successful like an adult holding a child's hand they will slowly guide them through this discussion, they will start gently tapering later this year, raise rates next year, everyone will understand it and there won't be a taper tantrum. that's the bull case and the other part, q2 and q3 will be like the fourth quarter and first quarter, everybody will be wrong and the numbers will be much higher and jpmorgan came out this morning and they raised their numbers on exactly that theory, so you put that
9:44 am
together, and a somewhat powerful bull case on what happened with the federal reserve. look at the earnings situation the earnings, the outlook again, applied materials, the retailers had tremendous numbers, but look, here's the take-away from the retail reports this week there is an awful lot of cash out there. the consumer is really flush they're spending at home and they're going out. the credit card debt is low. there's lots of stim luns-driven spending out there and there's a problem with a lack of people and a lack of goods out there right now. so overall, the retail picture looks very well. here's the problem, just look at xrt. this is what i watch in the etf space for retail this is equal weighted of all the retailers in the u.s it's up 200% since the bottom last year. macy's is up 60% this year gap is up 60%. kohl's is up 35% huge moves up. so it's kind of tough, they've already anticipated this perfect retail environment that we've seen and that's why you are getting this week, very modest reaction,
9:45 am
to some of these big names that are reporting, really, really great numbers. but you know, we should have these problems, the market is at this point almost fully valued, at least for the retailers, we should have these problems, you know, david. a good week. >> it has. and when you put that chart up, i think it does, it speaks volumes. bob, in terms of the moves we've seen especially in retail who would have thought you would have seen the xrt of 130%. bob, thank you bob pisani. >> actually 200% since the very bottom in march. rather remarkable. >> it is jim, it is remarkable. >> people thought everybody was going out of business. they didn't think moderna and pfizer would be able to come up with a vac and operation warp speed, and they didn't think the money to the consumer would be returned to them the moment it opened and the a long period of time and the only thing that turned open was the essentials and it turned out the others came back
9:46 am
and i thought kohl's had a good quarter, and the stock was down yesterday, and ralph lauren had a good quarter and to bob's point, applied materials, these stocks have run up enormously as a result -- >> run up does not mean they can't continue up. >> there's a lot, where they can go to what mr. moynihan said yesterday, there is a huge amount of money on the sidelines in accounts that could conceivably go into the stock market. >> a lot of savings. >> yes huge savings. >> the consumer, fantastic. >> not above what would typically be the case. data out manufacturing and services let's get to rick santelli for that rick >> this is a preliminary read from market, markit, the pmi group, and the preliminary read for the headline pmi for manufacturing, 61.5. that is a post-covid high. if we look at what is going on in the service side, 70.1, post-covid high. and not to break the trio of post-covid highs, the composite
9:47 am
also joins in, at 68.1 now, granted, these can change from preliminary to final, but at this point in time, they continue to point as many indicators do to a very hot, hot, hot reopening economy a one-week chart of tens, tells you quite a bit of information, monday we had the low of 1.60 yield. we're revisiting or getting very close to revisiting that today and it is not only the bottom of an important range, it's what many tech nickss -- technicians will call the pivotal area and any above 1.60 are treated more bullish and higher yields than those below that and if you open the chart up to the very end of march, when we had our post-covid high yield close, at 1.74, you can see the performance since then, it has been mostly, mostly very tight with respect to consolidation, near that upper level. there's been very little retracement. and if we look at what happened with bunds this week, a notable week, on this week, you see
9:48 am
right in the middle of the chart, that minus 07, that is the highest intra-day level, the least negative that that market has traded in two years. and finally, a year to date of the euro versus the dollar, which is the mirror image of the dollar index, that currency is hovering at some of best levels since early in the year, and do keep in mind, it closed last year at 122.16, we're getting very close and put the dollar index up there, it would be the exact reverse, basically closing at some of the lowest levels since early in the year. jim and david, back to you >> thank you, rick rick santelli with the bond report. well, coming up, we have a big show later this morning on tech check, featuring exclusive interviews with microsoft ceo satya nadella, and get this, snap founder and ceo evan spiegle as well. >> wow. >> wow >> get a selfie with him. >> get a selfie and make sure to watch. that's at 11:00 a.m. eastern,
9:49 am
when they stop >> where wilt i be for "tech check". >> i want to be a guest. >> enough with the guests. stick to your part you did it. a steakhouse with a vegan menu... that serves dinner at 4:30. personal assistance just a text away. one of the many things you could expect when you're with amex.
9:50 am
9:51 am
do you have a life insurance policy you no longer need? now you can sell your policy, even a term policy, for an immediate cash payment. we thought we had planned carefully for our retirement. but we quickly realized that we needed a way to supplement our income. if you have one hundred thousand dollars or more of life insurance you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit conventrydirect.com to find out if you policy qualifies. or call the number on your screen. coventry direct, redefining insurance.
9:52 am
the leaders on the s&p in fact, led by boeing which we've talked about jim will have more on the reports perhaps being able to temper it somewhat nvidia up on that ur ffoor one split. we're right back with stop trading. we're good. the remarkable gx and lx. get 0.9% apr financing on the 2021 gx 460. experience amazing, at your lexus dealer. cal: our confident forever plan is possible with a cfp® professional. a cfp® professional can help you build a complete financial plan. visit letsmakeaplan.org to find your cfp® professional. ♪♪
9:53 am
9:54 am
9:55 am
let's get to stop trading. boeing is the focus. >> boeing is owned by my travel trust. i'm going to talk against my book the company is kind of tempering that story saying they're making progress, but they disagree there's a real timetable for 42. they're saying listen, just understand the customers have not yet committed to that. so people who are buying it aggressively may find themselves god smack. >> the story we're relating is -- >> the 42 -- >> the 42 buy, 2022.
9:56 am
>> the production. and boeing is not -- has not said that. and that story was confirmed >> but you like the stock? >> very much so, but this is an important element. we know that that plane is the -- we don't know whether people want to buy it or not, this story presumes not only do they want to buy it, but there's strong demand for it and that's not true >> okay. >> so let's be careful >> even though i'm talking against my book. i don't think the story reflects the circumspect nature that they're going to have a lot more orders >> what's on the show tonight? >> i at sysco two nights ago i have another another one this one will be good to know about whether people are going to restaurants and measuring mcclain. people are breaking into systems
9:57 am
and hacking them i want to know if they can stop that >> i want you to have a fantastic weekend. >> i'm going to try. i am >> but you're reeling from the first 15 minutes of the show >> we got off to a rocky start, but we're good you have a great weekend >> you too >> okay. >> you going to study this weekend like me? >> always. i'm always studying. >> good. >> i don't study at all. 'vhamo sckwhhe volatile week wee d retos en we come back. hey lily, i need a nes plan for my business, but all my employees need something different. oh, we can help with that. okay, imagine this... your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, asap! so basically i can pick the right plan for each employee... yeah i should've just led with that... with at&t business... you can pick the best plan for each employee and only pay for the features they need. new projects means new project managers.
9:58 am
you need to hire. i need indeed. indeed you do. the moment you sponsor a job on indeed you get a short list of quality candidates from our resume database. claim your seventy five dollar credit, when you post your first job at indeed.com/home.
9:59 am
- [announcer] grubhub perks give you deals on all the food that makes you boogy. (upbeat music) get the food you love with perks from... - [group] grubhub! - [announcer] grub what you love. ugh, these balls are moist. or is that the damp weight of self-awareness you now hold in your hands? yeah (laugh) keep your downstairs dry with gold bond body powder.
10:00 am
good friday morning. welcome to another hour of "squawk on the street. i'm david faber along with morgan brennan and mike. carl has the morning off let's look at markets a half hour into trading. we're up on all the major averages with the nasdaq lags. existing home sales out just moments ago. and diana has that for us. >> reporter: existing home sales down 2.7 % to a seasonally adjusted annualized rate of 5.85 million units that a miss. the street was looking for a slight gain. sales 11% higher than april of 2019 i'm comparing it to 2019, not 20 20, because we know the market
10:01 am
shut down last year in april sales are up over 33% from a year ago what's the problem inventory down 20% just 1.16 million homes for sale that's around a two-month supply low. that's switching pricing median home price up to an all-time high and up 19 .1% from a year ago also the strongest annual appreciation on record but a lot of this is that m median, skewing the price higher remember, home sales below 1 100$,000 are dropping. home sales between 250 and $500,000 unchanged sales of homes between 750 and $1 million up 146% from a year ago. $1 million plus home sales up 212% from a year ago even as mortgage rates were raising in february and march when these contracts were inked, the homes are selling fast just 17 days on the market
10:02 am
sales were lower month to month across the board except in the midwest where, of course, home prices are a bit lower >> oh, my gosh those numbers. eye popping how high can we go here thank you. we're 30 minutes into the trading session. here are the three big movers. deere beating on the top and bottom lines raising the full-year forecast a rebounding global economy, higher commodityprices boostin demand for farm equipment. shares up 2.5% carnival planning to resume alaska cruises in july in what would be among the first sailings out of the u.s. since the start of the pandemic. the shares up half a percent palo alto networks surging after raising full year forecast amid an increase in remote working security issues and challenges those shares are up 6 %. tech stocks staging a small
10:03 am
comeback with the nasdaq looking to avoid a fifth straight week of losses. dom has more on the moves. >> fourth straight week of losses may be snapped. we're avoiding some moves on the technology and the nasdaq trade overall. to put things in perspective for the nasdaq, composite index year to date up 5.5%. underperforming the major indexes but now we sit roughly 5% below the record high levels we've seen and more importantly, for some traders who like to look for patterns, the nasdaq is above 13580, the level of the 50-day average that's a level some traders have been watching as an area of possible resistance or staling out. we'll see if the inside zach can claim that back. as for the tech trade, a bounce there. a little bit of buy the dip mentality. the dip has been all year for technology stocks. it's the worst performing sector in the s&p 500 on a year to date basis overall. and now it's trying to get some of that underperformance back
10:04 am
again. so that's a key area to watch. sector and economy, there are certain parts that have been seen as leading indicators for the overall tech trade look at the big internet stocks over the course of the past two days we've seen a big bounce for this etf, the ticker fdn, they track the social media type names. the semi conductor names up 3% in the last two days and then you can see here, 3% gains for cloud computing as well. these have gone on the shopping list for certain traders and speaking of shopping lists, companies specific trades on the megacap technology side of things that have seen signs of life in just the last week check out sales force up 3.5% in a week paypal holding up 3.5 %. and nvidia on the chip side up 6% in the one-week span. sales force has been as you know an underperformer for quite some time now over the median to longer term. these types of names have gone on the shopping list as the dip has been bought in some way, david, over the last week.
10:05 am
back over to you >> yep that crm since they announced the slack deal, the stock underperformed despite the labor shortage we hear about in the economy, it's experiencing a pandemic productivity boom. steve liesman explains that. >> reporter: good morning. yeah it's an astonishing fact of the pandemic that output from the u.s. economy, it's now topped the level from before the pandemic but it's been done with 8 million fewer workers. it's the result of booming productivity that several economists think will outlast the pandemic and that's good news for workers and corporate profits as well. covid causes to shut down labor intensive businesses which were inherently less productive and it then forced the rapid adoption of technology we had the actually to produce so much more per worker than anyone would have thought possible a year ago. the sources of the productivity
10:06 am
include more e-commerce. it's more efficient. more work from home. in some cases for efficient. doing more work with fewer workers and creative destruction that gets rid of some of the unproductive businesses. productivity normally booms after res sessions the least efficient workers are let go often but it comes back down to earth as the economy normalizes. the difference this time is you have new technological advances, new ways of doing things like virtual real estate sales and work from home, and they're not seeing going away. work from home has mobilized part of the household capital stock. home offices and computers for business purposes. much like what uber and airbnb did for cars and second homes. so what are the results? it's a mixed possibility of higher wages and higher corporate profits. increased potential growth for u.s. economy, but maybe slower employment gains as we bring back the easy workers and find
10:07 am
room for the other ones. it could undermine the inflation scare that's out there university of chicago professor steven davis and his colleagues did a survey of 30,000 workers and found work from home to here to stay. they estimate from 5% a full day's work before the pandemic to 20% permanently the paper argues having been forced to find ways of doing things differently, and finding them more efficient in some cases these innovations are not going to be abandoned. back to you guys. >> this is fascinating to me in some ways it reminds me of when we first saw automation being applied to the auto industry it was the first one to start to adopt that type of technology a number of years ago. the argument had been that the technology would displace workers in what happenedis you did see a productivity boom on the factory floors this sounds like it's similar to that on the one hand on the other, i mean, it was just a couple years ago we were talking about where was the productivity we couldn't find it and the
10:08 am
numbers were lagging the growth in the economy what specifically has changed? is it the pandemic or something else >> i'm going to make a new phrase you know how necessity is the mother of invention? i'm going to say necessity is the mother of invention at adoption and the reason is because we had all this stuff out there a while ago. and we didn't know what was there. we didn't know we could do some stuff from home using all this great computing power at the desks. we had zoom. didn't know how to use it for efficiencies what's going to happen as you know is that some things are going to be greatly helped by this some things are going to be hurt and investors have to kind of watch that i would like to make a note that everything with you somehow comes back to transportation, doesn't it >> manufacturing in some sense steve, industrial activity in some sense steve liesman, thank you really smart take. >> thank you let's get over to kate tracking the wild moves in crypto also the fed's mention of digital dollars. kate >> morgan, great to see you.
10:09 am
jerome powell saying they're working on a digital dollar shining light on a lesser known area of the crypto market. stable coins it has been booming this year. these are still crypto currencies unlike bitcoin they're priced one to one with the dollar or any other fiat currency. that gives investors the advantages of a crypto currency but the stability of a major currency people with using stable coins to buy collectibles. they often concert your dollars to digital versions on the back end. another driver, global demand. investors living in emerging markets might be looking to get exposure to dollars. that's not always easy with local banks. if you live in argentina or brazil, bit coin might not be the safest bet against currency
10:10 am
devaluation. usd coin saw the market cap jump 300% this year alone there's dozens of others out there. they are relaunching in the u.s. there's more than 50 governments saying they're working on something similar. this could bode well if the fed does end up launching a u.s. dollar coin, but even though the price wouldn't be jumping around like bis coin, there's risk. powell saying this week they, quote, carry potential risks to users and the broader financial system and guys, china's digital currency is one to watch competition may be putting pressure on the fed and other central banks to roll out their own versions mike, back to you. >> kate, thank you very much for that rubdown i appreciate it. as we head to a quick break, a look at the road map tim cook taking a stand in the anti-trust trial plus the governor of
10:11 am
connecticut is going to be back with us. we'll talk about that state's mask mandates, the reopening strategy and a lot more. and the ceo of microstrategy on what this week's wild moves for bitcoin means for his stock. a lot more still ahead don't go anywhere with the s&p turning positive on the week
10:12 am
10:13 am
which shows will you be getting into tonight? how 'bout all of them. netflix. 'cause xfinity gets you really into your shows. when one burns for someone who does not feel the same. daphne, let's switch. from live tv to sports on the go. felix at the finish! you can even watch your dvr from anywhere. okay, that's just showing off. you get all of this on x1. so go on, get really into your shows. you need a breath mint. xfinity. it's a way better way to watch. a thel k -- we have the
10:14 am
latest on tim cook >> that's right. tim cook is ready to take the stand this morning the apple ceo is testified to testify in california where apple is battling fortnight major epic games. apple wrapping up the legal arguments in the fight we expect cook to testify for roughly three hours today. it's going to be about 90 minutes of direct examination by apple lawyers. one to two hours of krgs by epic lawyers and five minutes of redirect examination by apple attorneys. cook is expected to testify about the business and operations, development and launch of the app store and competition faced by the company. this is, of course, a high profile moment for cook as he defends the i-phone maker. the pressure is on he is also used to it at this point. cook has been ceo for nearly ten years and he prepared hard for this fight reportedly including hours of practice from former prosecutors chosen by his legal team
10:15 am
mike, back to you. >> josh, thank you with more on apple's tim cook taking the stand and how it may impact the stock, joining us is tom, davidson, senior research analyst. obviously no way to know how the testimony will go. what's your baseline assumption here in terms of outcome and potential impact on apple app store revenue down the road? >> excellent in my opinion the long-term outcome for apple is it may have to employ a graduated scale for commissions through the app store. act be 30% and a 30% decline over time. there's a situation like this with subscriptions where it's 30% for the first year and 15% thereafter i have a hard time believing a judge would rule that 700 million to the app developer and 100 million to apple was apple chargiing exorbitant rates to them
10:16 am
>> we don't know the breakdown in terms of apple's take in gross dollar terms but do you think that changes much in the way the growth trajectory for the services business? >> great question. the way i think about this, if you look at the strength of apple shares over the last 12 months, it's been heavily driven by their nonhardware or services revenue. so this could have an impact on the stack to the extent you saw materials slowdown in revenue that they get from the app developers but again, i think it's a graduated scale over time. i have a hard time believing, for example, it goes to zero or that it goes to a smaller number like 10%. so net net apple shares will be okay no matter the outcome >> tom, say the outcome is not in apple's favor, and i realize it doesn't necessarily go down to zero, but you see lower fees in the future. say that happens looking at the coverage, you have a number of companies, number of stocks that you do cover that have offerings in the app store.
10:17 am
have you gamed out what happens for them >> sure. to the extent we think about curiosity streaming or roku or amazon, anything that would lower their commission to apple would be positive for them so i do think that to your point, this could be a positive for companies that are generating significant revenue on the app store i think what's interesting with amazon is because of their efforts in apple tv, their commission rates is more like 15% than 30% it may not be so important to amazon >> slightly bigger picture, you have this effort going on when apple is trying to defend the practices in terms of app developers imposing privacy measures for users. making it tougher for ad-based apps to track user activity. on one hand apple will say it's a matter of principle. they're creating an enclosed type of eco system that is not necessarily about kind of
10:18 am
letting everybody else parti participate. is that a risk or opportunity for apple? how do you sort that out >> great question. and i think it's a risk. if you think about tim cook today on the stand, tim cook presented to the house judiciary committee along with the amazon and facebook and dwgoogle ceos. you're seeing there's regulatory risk for them. because we could debate the business practice of making it harder to track advertising but clearly apple has a lot of influence as does amazon, google and facebook on consumer's lives. i think there's significant regulatory risk. >> tom, thanks a lot for your lots this morning. we appreciate it >> thank you coming up in the next hour, do not miss an exclusive interview with microsoft ceo must-watch tv. first, check out shares of virgin galactic moving higher again today following yesterday's rally as ubs upgrades the stock to a buy with a price target of $36 a share
10:19 am
ahead of that flight test that's scheduled for tomorrow shares now up about 25 % to 26% on the week. more "squawk on the street" on the other side of the break. the moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base claim your seventy-five-dollar credit when you post your first job at indeed.com/promo
10:20 am
in business, it's never just another day. it's the big sale, or the big presentation. the day where everything goes right.
10:21 am
or the one where nothing does. with comcast business you get the network that can deliver gig speeds to the most businesses and advanced cybersecurity to protect every device on it— all backed by a dedicated team, 24/7. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities. - [announcer] grubhub perks give you deals on all the food that makes you boogy. (upbeat music) get the food you love with perks from... - [group] grubhub! - [announcer] grub what you love.
10:22 am
welcome back it is now time for our etf spotlight. looking at the chip stocks ticker smh in the green. hovering around double digit gains on the year. it's not in the green. it turned slightly negative. that's the semi etf vaneck vector it increased the 2021 output by 60%. that's compared with last year amid a global shortage the company going onto say it had taken, quote, unprecedented actions to help auto makers. the stock is up 120% over the last 12 months even as it's down about 1% right now >> meantime, bitcoin trying to avoid what would be the worst week you can look at it in two months and mike, i know you've become looking at overall weakness in this sector and the relation to the overall stock market >> yeah. david, really follows maybe
10:23 am
three or four other kind of microsectors of the market that had sort of a mini mania and then they cracked. and the overall market is absorbed in it last summer the big complaint about the market or the perceived risk was that it was too concentrated in faang. they had never been so big in the s&p. they underperformed since then and the market held up starting in february, we saw things like the kind of arc invest complex, the cloud stocks actually the retail participation in bitcoin through the bitcoin gray scale trust also all rolling over to a fair degree as well as spacs. that market deflating to some degree, and each time the overall market has been able to handle it so far now, you can sort of say that maybe it's just going to eventually get to the rest of the core of the market maybe this has been overly dependent on the one-time revaluation higher of cyclical stocks and maybe it's fatigued
10:24 am
right now if your complaints back then were about the pockets of froth, those have mostly been rectified or at least come back to the pack and not necessarily undermined the overall take. >> right we've talked a great deal about the speculative nature of any number of companies. others which are also sporting incredibly hefty multiples or revenues years out from now. what does historic show us the late 90s and, you can say it was bad for the broader market eventually >> it did. if that part of the market really is so huge relative to everything else, the index can't escape that pull of gravity. what is interesting when you go back to the period right now everyone is talking about how that kicked off this renaissance of value investing and you had multiple years where valued beat growth coming out of 2000. that's very true but it happened because the growth index went down 60% peak to trough
10:25 am
the whole index went down peak to trough. nobody seems to be right now saying well, growth is going to get decimated and value will hold up okay >> all right mike, thank you. speaking of bitcoin, the ceo of microstrategy will join us on the other side of this break squawk on the street is back in two. ♪ ♪ (upbeat music) ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪
10:26 am
10:27 am
welcome back here is your news update at this hour the cease fire between israel and hamas is holding with both sides claiming victory there was a squirmish between palestinians and palestinian police confrontations at the site earlier this month also helped trigger the 11 days of violence that killed more than 20 0 people overnight many families who
10:28 am
had shelter in schools run by the united nations started returning to their homes air travel was disrupted this morning by a problem with the saber software that's used in many airlines to handle check ins and it was resolved early this morning and a warning now from the cdc for the many people who started raising chickens during the pandemic wash your hands after handling live poultry salmonella bacteria linked to backyard chickens is being blamed for 163 illnesses in 43 states roughly a third were children under the age of five and apparently the same warning applies according to the cdc to ducks. in the event you're interacting with ducks, wash your hands. >> the cost of free eggs, i guess is something you have to keep in mind >> a small price to pay. we're about an hour into the trading session. let's look at the biggest leaders on the nasdaq 100 this morning. actually, the overall gain in the market's moderated in the last hour. nvidia at the top announcing the
10:29 am
stocks more than 3% off the e-bay, splunk among the leaders. the laggards on the nasdaq 100, if those come up, there we go. trip.com is leading to the downside lam research in semi conductors. crypto's wild week continues with the treasury talking about stricter compliance. joining us is michael sailor thank you for joining us today >> thanks for having me. always happy to be here. >> given the fact that we've seen this wild week, what does the price action prove to you? >> i think the big picture if you look at the last 12 months is march 12th of 2020 we had $2 billion of trading and the price was around 5,000 and august 10th when my company entered the bitcoin market, we
10:30 am
had the price around 11,000. may 18th, biggest day maybe ever for bitcoin. we had $13 billion traded with price around 37,000. i think what those stocks tell you is that bitcoin is coming to life it's an institutional grade safe haven asset. although it's volatility, that's the price you pay to outperform the s&p index and be outperforming nasdaq by a factor of eight in the last 12 months >> did elon musk help trigger the selloff? >> he's enthusiastic about bitcoin. he's just as enthusiastic as i am he's also enthusiastic about renewable emergency and making the environment green. he'd like to be part of that solution he'd like for the bitcoin community to work with him i think everybody in bitcoin has the same objective there's a little bit of skittishness in the market this thing trades 24/7 /365 on
10:31 am
tweets sometimes you get volatility at tend of the day, i think we have a good plan and everybody is aligned >> all right even though elon musk -- he deleted the tweet -- >> the cyber hornets come up for colorful nicknames for all of us >> all right so i want to get into the fact that microstrategy stock trades in lock step with bitcoin given the fact that you have billions in the balance sheet in many ways it overshadows the fact that you have a recovery afoot in the core business which is business intelligence given the fact that we saw double digit revenue growth you're expanding the cloud offerings as well. does that frustrate you or do you see the fact that you're being at least by investors rued as a bitcoin holding company, part of a longer-term vision >> i step back and look at the big picture.
10:32 am
if you look at it from minute to minute, day today, you're frustrated but we're up by a factor of 4x our shareholders are delighted our employees are delighted. sometimes bitcoin fixes everything our last two quarters were two of the best quarters in a decade for the software business. and the corporate brand has been amped up by probably a factor of 1,000 or more. it's great for our core enterprise software business everybody wants business intelligence, and i think it's great for bitcoin and it's been great for the microstrategy share shareholders in march they were looking at a 90 stock if you look at it from that point of view, nobody is complaining. >> i get that. and we've seen the gains despite the volatility in bit kobe bryant when you have analysts describing two-thirds to four fifths of your enterprise value to the bitcoin that are on our -- in your treasury right now rather than the core business, how much can the synergies actually continue to
10:33 am
contribute to the core business even if you do see prices come off in bitcoin even more aggressively >> you know, we have two strategies one is to grow the software business and marketing is key to that the fact that i now have a million twitter followers makes it easier for me to deliver the company's business intelligence message to the world and the bitcoin strategies require more bitcoin the company has not financed its enterprise software cash flows so the business intelligence software company is a financeable asset in the open market and so i feel like we've got a great synergy, because the business intelligence software is stable, and it would be viewed as a value stock were it not for the fact that we bolted on a dominant digital monitoring i think both of them work together well. and microstrategy is unique. we're the only publicly traded
10:34 am
public traded company -- >> right the only one that's done so or attempted to so far. i'm wondering the theme of institutional adoption of bitcoin of crypto has been dominant for a while, but that adoption is really coming in the form of investing in it as an asset n trading it, lending against it, borrowing. all the things that are essentially what a financial asset or gold would do as opposed to using of the network for other purposes that have economic value necessarily so where does that all fit in if we just created something that's electronic gold? >> i think the bitcoin is the dominant digital crypto asset. what people want is -- look, if i passed a law making it illegal to mine anymore gold and then i eliminated gold as a jewry usage and numbered the gold to 21 million gold bars and took away
10:35 am
the masks and allowed you to move at the speed of light, gold would be more valuable so bitcoin is crypto gold, but the difference is gold topped up in value at $10 trillion whereas the market for an institutional grade safe haven asset is $100 trillion or more every investor needs to find a way to store their value, and they're scrambling between do i buy indexes or bonds do i buy commercial real estate? you know, what do i buy? a set of stocks? what do i do it's a hard problem. everybody has it and bitcoin is the solution to the problem. >> and yet, jpmorgan this week says institutional investors have been selling out of bitcoin and rotating into actual traditional golds which kind of throws a wrench in the argument. at least right now around digital gold but i'm curious in terms of buying and the assets, you continue to buy more bitcoin 229 coins this week. 271 last week. both at average prices well above where it's currently
10:36 am
trading. i realize in the entirety your balance sheet has sizable unrealized gains over the past year plus. but how do you ascribe value how do you determine the price at which you do buy more bitcoin? >> you know, when i was buying bitcoin at 9500, i did it with anxiety thinking someone is going to figure out they should buy this stuff and no one will sell it to me. my opinion is who are these people selling this to me? when banks say we're going to rotate out of it, i think it's good the other day $13 billion worth of bitcoin was bought. someone needed to sell it for somebody to buy it bitcoin is up 346 %. gold is up 8% this year. gold is up 2 % a year for a decade bitcoin is up 135 % a year for a decade gold is defective as a store of value for 100 reasons. i had to debate on it. 750,000 people lost that debate on youtube and so i'm hoping that some bank is going to tell people to sell
10:37 am
their bitcoin and buy gold, because i intend to buy a lot more >> right michael, it's david faber. i've been listening to you obviously you've been right on your predictions in terms of the movement of this crypto currency but you do understand how much risk you're taking on here, don't you? >> the risk of holding dollars is you're losing 1% to 20 2 -- 2 % of your purchasing power a month with 100% certainty. that's the position we got ourselves into with the monetary policy i think it's clear if you have a decentralized crypto asset network with more than 150 million holders that's adding 2 million to 3 million people a week running on tens if not hundreds of thousands of computers in every jurisdiction in the world, i mean, there's something solid there. i mean, bitcoin is an idea that's worked. it might have been risky ten years ago, but how long do you have to watch something spread like an idea virus before you
10:38 am
decide that maybe it's going to be around for a while? >> yeah. that's what makes it attractive to folks such as yourself. the so-called bitcoin bulls. it's why it's getting increased scrutiny from others the treasury saying it's ratcheting up the scrutiny, especially on the tax front. are these not risks for your company? >> i think they're nonissues because when you have an inflationary environment, money decomposes into currency that's the meeting of exchange and then store of value which is the asset which at the store a value. bitcoin is an asset. it's regulated as an asset taxed as an asset. designated as an asset the government said nothing anywhere in the world. in china, in iran, in europe, in the u.s., people are holding this as assets i think that the banks, their view is they don't want you to challenge a currency like the u.s. dollar and they want you to
10:39 am
pay taxes when you transfer your assets so for the treasury department to say you know, if you transfer more than $10,000 of bitcoin and oh, by the way, you got to pay taxes when you transfer or sell it, that's a totally nonevent. that's been the status quo with every asset in the country forever. this is just legitimizing bitcoin as the apex asset, the best one and i think it's good for the industry >> is there a price at which that you would actually realize some of those unrealized gains in bitcoin for your company? >> you know, my view, and i've said it. bitcoin is the apex property of the human race if i had a billion dollars and i buy a building in new york city, i can't move it. if i buy a billion dollars of apple stock, it has no tangible value outside of the new york stock exchange or the nasdaq i can't move it. i can't move sovereign debt around bitcoin, if you want to own a
10:40 am
billion dollars of bit kellyanne conway -- bitcoin, i could take personal custody that makes it the highest form of property rights there's no reason that that makes it the least likely thing to be impaired there's no ceo to screw it up. no board of directors to screw it up. the mayor of new york can't tax it if the governor of california wants to put a property tax on it, bitcoin with move to wyoming. >> just real quick before we end, and even the chinese who are once again, and that's why bitcoin seems to be lower this morning. reiterating the call for a crackdown on bitcoin mining? that doesn't impact it >> no. because bitcoin mining moves to the jurisdictions most welcoming and kentucky and texas would love to have bitcoin mining. and iceland and norway needs bitcoin mining it's an anti-fragile decentralized system the miners are going to move to where they can find the cheapest, cleanest energy and
10:41 am
the jurisdiction where the political environment is most supportive and that's what makes it such a brilliant creation >> michael, thanks for joining us today thanks for having me let's go to the cme and rick santelli who is looking at what else bitcoin with reports of china reiterating that crackdown on mining take it away, rick >> well, thank you, david. listening to michael was fascinating. but the point of whaim going to talk about isn't about whether it's a relegitimizing issue that we can now have the irs taking a look at. bitcoin and $10,000 transactions of potentially any transaction or the notion that inflation is the enemy because i agree with him. it is. the problem is might be the enemy to some, but to central banks, inflation may be the answer think about all the asset prices and what they do during inflating times and what it does to debt. not the least of which is how it
10:42 am
effects the reserve currency status with the u.s. we see janet yellen try to get a minimum global corporate tax why do you think companies listen to us on this issue because we're the reserve currency all that figures in. just remember, accepting bitcoin isn't necessarily the same as a rubber stamp of long-term approval i'm not here to tell you whether bitcoin is here to stay or not or whether it's going to work in the grand scheme of things i'm here to tell you it's a good technical commodity/coin crypto to trade it really is you don't need fundamentals. fundamentals, not required let's go to the white board, shall we here's a chart of bitcoin. right now it's trading around 37,275.7 6 we're right about here what i found watching bitcoin is you have to always try to tune up your charts not every chart is the same. and bitcoin seems to respond
10:43 am
nicely to a 34-day moving average. i picked 34 obviously because it's a fib nauch chi number. look at how nice it seems to work here's the thing i like most here's the all-time high of bitcoin. here's something about charts. the reason charts work so well is because human behavior is repetitive whether it's back in egyptian times or ten minutes ago, humans usually react in predictable, repetitive ways look at the chartline. here's the all-time high on mid april. 63410. 34 days from there was this week and the low of 38,336. exactly 34 days from then. you want to always come from key tops and lows not to mention all the areas right here around 37, 38,000 the if i had to give you a quick down and dirty, i'd say give it room, put a sell stop right
10:44 am
around 36,500. >> thank you two big interviews coming up on tech check including an exclusive with the microsoft ceo and the snap ceo that starts at the top of the ur 'll be right back. stay with us ♪ cisco. the bridge to possible. new projects means new project managers. you need to hire. i need indeed. indeed you do. the moment you sponsor a job on indeed you get a short list of quality candidates from our resume database. claim your seventy five dollar credit, when you post your first job at indeed.com/home.
10:45 am
10:46 am
we break down what's at stake on tdirang nation. more "squawk on the street" coming up.
10:47 am
connecticut announcing a back to work initiative giving $1,000 payments for obtaining new jobs we are joined now. always good to have you as we have throughout the pandemic before we get to that program, let me ask you where do you think we are given we've certainly seen the tougher times with you when you've come on the air and discussed that are we at or close to the end here >> i think so, david i think it's the bottom of the ninth inning if i can get those 20 to
10:48 am
35-year-olds, continue them getting vaccinated and up close in herd immunity, i'll feel confident. the fall could bring variants. we'll see. it's going to be a great summer. >> yeah. all right. it's going to be a great summer because why? everything is open now right? connecticut is fully open for business, i assume >> connecticut is fully open for business look, we started opening a year ago for outdoor dining we never closed manufacturing. we never closed construction but now we've completed it indoor and outdoor retail dining no masks unless you're unvaccinated then you have to wear a mask indoors a little bit longer. >> tell me about this jobs program and why you're doing it. we have talked a lot in fact, a number of governors of other states have chosen to no longer give the additional supplement of 300 million in unemployment insurance saying it's not encouraging people to go back to work. is what you're doing something along those lines?
10:49 am
>> we're giving $1,000 to the first 10,000 people that take the job. if you've been long-term unemployed a lot of people that are still sort of covid hesitant may need a nudge. we've expanded day care dramatically so it's easier for women to get back into the work force. and now is the time to give people an extra nudge to get back to work we need them, especially in restaurants and stores >> it's morgan i'm looking at the numbers, the percentage of population in connecticut that's fully vaccinated is 45.6% right now. what happens if you don't reach herd immunity? >> i like to say we got 75% of the adults vaccinated. and i think right now some of the younger demographics, we have work to do. if you study after the spanish flu, there was still pockets of resu resurgence we're trying to work hard in the inner cities to make sure
10:50 am
everybody gets vaccinated there. >> when we see more data come out and we see potentially the emergency use authorizations expanded to children or i guess younger children than we currently see, will these vaccines will mandated for kids going back to school >> i hope not, morgan we don't mandate the flu vaccine and overwhelmingly our people get vaccinated i would like to think it's the same thing with the covid vaccine. but all options are on the table. we have to get our kids and make sure they're in school later this summer and fall >> governor, pretty much everything pointing to minimum case counts let's say in the next couple months through the summer, seasonally, vaccines all the rest of it what are your public health folks telling you about preparations for the fall and winter how are we handicapping what that's going to look like? is it going to be like a flu finally? >> look, we hope so.
10:51 am
there could be a variant that comes over from india or brazil. we're not prepared for we know that the fall is more flu season so seasonality will not be our friend. if we have the overwhelming majority vaccinated at that point there's less opportunity for the variants to spread. >> we talked about the economy in your state. a year ago i can remember conversations that dealt with rainy day funds and what revenues were going to look like what are they shaping up as this year moves forward >> oh, my. we're -- we've got our credit rating upgraded by about everybody over the last couple weeks. we have a $3 billion plus rainy day fund if circumstances change we're paying down our pension, so these are all good things fundamental we have to do everything we can to keep people getting back to work and our economy growing. we had over 50,000 people move to the state of connecticut last year so people are rediscovering
10:52 am
the state and that's a good sign. >> getting people back to work, governor, i mean we're seeing a growing number of states trying to phase out the enhanced unemployment benefits. it looks like you're launching a program to pay residents $1,000 for obtaining new jersey jobs. why is that the tact you're taking the way i should understand you're paying people to find work to counter what have become incentives for some people to stay out of the workforce for now? >> the $300 from the feds, that disappears over the next few months, and there are a lot of people who are really immunocompromised or covid shy, but i think the $1,000 incentive rather than a disincentive is a good way to get people going again. we're going to find out starting money how many people take advantage of it. our restauranteurs and store owners are really excited about this. >> we'll be watching always appreciate it
10:53 am
thank you. >> good to see you guys. thanks. as we head to break on the last day of the trading week we're going to take a check on markets. it's a bit of a mixed picture. the s&p is up about 0.4% right now. it's going positive, it's basically flat on the week now and just down fractionally for the month. the dow is also higher up 242 points, but the nasdaq is under pressure it's down about 0.2% right now first, though, as a part of asian-american and pacific islander heritage month we're spotlighting cnbc contributors, business leaders and anchors and reporters. here is cnbc contributor tony zang >> try not to focus too much on what others think of you and let that shape who you are in your identity don't be afraid to go out there and explore and establish what your own identity is because american culture is so diverse and you can really find and be able to take advantage of what
10:54 am
makes you unique and pursue what makes you happy. that building you're trying to sell, - you should ten-x it. - ten-x it? ten-x is the world's largest online commercial real estate exchange. you can close with more certainty. and twice as fast. if i could, i'd ten-x everything. like a coffee run... or fedora shopping. talk to your broker. ten-x does the same thing, - but with buildings. - so no more waiting. sfx: ding! see how easy...? don't just sell it. ten-x it. i think you're going to like it here. umm, why is everyone... throwing things at me? look, as cfo it's my job to be ready for whatever's next. that's why i have my finance team, randomly hurl things at me. it's also why we use workday. it gives us insights, so we quickly pivot our strategy, people, planning, you name it. sorry, sir. i will aim straight at your next step. see that you do. would you like some coffee?
10:55 am
workday. the finance, hr, and planning system for a changing world. ♪ do you have a life insurance policy you no longer need? now you can sell your policy, even a term policy, for an immediate cash payment. we thought we had planned carefully for our retirement. but we quickly realized that we needed a way to supplement our income. if you have one hundred thousand dollars or more of life insurance you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit conventrydirect.com to
10:56 am
find out if you policy qualifies. or call the number on your screen. coventry direct, redefining insurance.
10:57 am
. want to take a look at shares of kansas city southern it's a back and forth drama we've been following closely when it comes to at least mergers and acquisitions and i can tell you the news is kansas city southern has announced that the board of directors in consultation with their legal and financial advisors have unanimously determined the acquisition proposal from canadian national is superior to the deal that they previously had with canadian pacific and they have terminated that merger agreement and entered into the new deal as we expected, morgan, that they would. we were waiting this morning, yesterday i reported they would do it prior to the open. in fact, i did hear they had a board meeting this morning and went a bit longer but we have the press release out now. they have signed that up want to look through it and see if there's anything interesting in terms about the voting trust or anything else of course, it is a $700 million breakup fee that will be paid by them to kansas city southern that will go to canadian pacific and they are including i think
10:58 am
$1 billion fee of their own. not unexpected. >> yeah. >> although cp has been fighting hard to say this deal will not pass muster with the antitrust authorities. >> yeah. they've continued to say that, even standing pat on that original bit it's going to be interesting to see now to that point what happens when that approval request is refiled now by canadian national with the surface transportation board and how all of this plays out given the fact that they are expected to be held to tougher guidelines, regulatory review and the canadian pacific deal itself was i think that speaks to why you're seeing kansas city up half a percent and not more despite the fact you're talking about a $320 per share price on this deal. actor hill harper hoping the recent drop in the price of bitcoin will lead to an opportunity for people of color to invest. frank holland has more frank? >> hey, morgan
10:59 am
10,000 satoshis, fractional shares of bitcoin, will be given away as part of this tour hill harper has launched to promote his fin tech the black wall street the actor and activist is educating people of color on cryptocurrency here's harper's argument bitcoin's 40% rise this year makes it an ascending asset as opposed to the dollar that's basically flat he believes the free fractional shares will demystify bitcoin. >> we want to show and prove by giving free money away, give satoshis and saying here's where they will sit, this is how you can access them and move them around and we want you to dollar cost average into this asset class. it's important to do that by me putting my money where my mouth is >> bitcoin adoption by investors of color is on the rise with black and latino investors likely to hold crypto. recent decline may scare investors of color but urging them to see this as a buying
11:00 am
opportunity highlighting only 21 million bitcoins can exist those satoshis will be on may 31st the anniversary of a black wall street which the app is named after. >> frank holland thank you for bringing us that news. that's going to do it for "squawk on the street. "techcheck" starts now have a great weekend. happy friday welcome to "techcheck. i'm jon fortt with deirdre bosa and julia boorstin carl has the morning off today an exclusive with microsoft ceo satya nadella. microsoft's vision for the future of hybrid work. another exclusive with evan spiegel. and finally, apple ceo tim cook takes

27 Views

info Stream Only

Uploaded by TV Archive on