tv Squawk on the Street CNBC August 18, 2021 9:00am-11:00am EDT
we heard from home depot and target and walmart yesterday, both those numbers better than anticipated. we'll see how these things shake out. that does it for us today. make sure you join us tomorrow, joe and andrew, see you guys later. right now it's time for "squawk on the street. >> good wednesday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer at the new york stock exchange, david faber has the morning off. stocks look to head to losses after that worst decline in nearly a month we got retail earnings rolling on from target lowes, tjx, and we'll learn more from the fomc minutes. the retail rollout, target and lowes with results we've got the numbers. plus, fraud hype noise and confusion, why one fed official is slamming the crypto market, and apple near an all-time high
after recapturing that $2.5 trillion valuation. retail definitely the name of the game this morning. want to talk lowes i guess to begin with >> i have marvin ellison on tonight on "mad money. i think he's doing an exceptional job. he was helped by how badly his stock was hit off home depot gross margins hit consensus, that was terrific. the regular consumer did well. if you go between the lines yesterday, i would have written home depot's release differently. they made it seem like that what's happened is the consumers cooled and not stopping anymore on weekends. we know that travel and entertainment is being hurt by delta, suddenly circular reasoning. we think wait a second, maybe the consumer's not going to do anything i'm not buying that. that will be the narrative housing starts are not good. yesterday we heard that retail sales aren't that good we also heard inclination that
auto's not that good i cannot prove that auto's not that good at all i think that's going to be the wrong narrative. when you read what marvin did, you kind of feel like, wait a second, business is pretty darn good, but the stocks they've run so much, and lowes stock would probably be flat to down if it weren't for the fact that it was really crushed yesterday by home depot. >> on a two-year stack, they're doing 30% versus depot 29. >> right so this is the beginning of what i've been waiting for with marvin i think that ellison always from the day he took it would get it to where it is comparable, if not better than home depot home depot owns the pro market i think marvin is making inrows in the pro market. a lot of it has to do with the stores themselves, which are much better looking. the star of the show is walmart. >> still >> how many different -- i've
got so many different people saying better than expected, better than expected i was texting an associate i have at walmart, put doug out. i mean, doug did great now walmart's bigger than all these guys home depot did do $40 million. can we pull back for a second, when you shop at walmart, you're still shopping >> oh, yeah. >> the retailer is -- maybe they're a lower end customer all i can tell you is that walmart's numbers were so extraordinary. lowes on a two-year stack were great. home depot says there's more pro than consumer. i listen to brian cornell. if you listen to brian cornell, i think we've all been accustomed to brian cornell saying when things are not great, they're not great he certainly didn't say -- when he started talking the stock was down nine, when he finished talking the stock was down six.
the cat cliz m of retail, and a number on housing starts, i'm in the buying i will not say that suddenly jay powell should be talking about cutting. >> it was definitely the theme for cornell. he used the term resilient a lot talking about the consumer and whether or not they've been buffetted by the delta variant. >> i just threw a list of worries that the market focuses on every day from covid to inflation to labor shortages is there anything you worry about you don't see particularly about any of those. >> i worry about all of those. i wake up every day with a list of worries i worry about covid. we put together a task force all the way back in january of 2020. we meet almost every day to talk about what's happening with covid state by state and across the globe. i meet with our team to make sure that we're getting the right value embedded in our
offering we worry about all these variables, but i feel really good about our strategy, the capabilities we have in place, and the experience of our team, and i think that gives me great confidence that we'll continue to perform well through the balance of this year and into next year. >> so traffic up 13, in-store comps up nine on a tough comp. >> yes >> it sort of reminds me of what some said about yesterday's retail sales print that was it's not about delta. it might have been about auto shortages, prime day being the prior month. non-store down three. >> maybe the consumer's not too worried. >> management points to robust second half outlook. that's what i want to see from brian. this is what's going to happen target will open down five and the headline will be target sales okay cornell petrified about covid. you mentioned the word worry four times there i think the real headline there is target consistent, if not a little bit better.
and shipt is doing well. by the way, you know, walmart just to revert for a second. walmart, their own -- was supposed to be bad and it was great where's that story i want to come back all the way and say maybe it's only home depot that was the outlier, and that stock was up from 150 to 330 and amazon being down for the year is starting to petrify people. >> yeah, there's talk of a double top on hd the one wrinkle on target may have been the guide on upper margin, and maybe some of these supply chain costs are catching up right >> yeah, but he talked about how he's having no problem whatsoever getting inventory he was talking about having a couple billion dollars in inventory. he's talking about having a season, halloween, he's talking about the old fun target but this is both target and
lowes have good outcome given lowered expectations, and people are willing to buy lowes off of that, and they're selling target off of that. i think that i am not going to -- that target is going to rally today. it's obvious that this is something that people are going to say i'm going to ring the register on. maybe i switch to walmart which is only up 4% for the year. >> wow >> when you look at some of these stocks and you say, okay, so target's up 44%, walmart's up 4%, you know, hey, maybe -- you know, people are looking at it relatively doug mcmillan, i've got to get down there i've been following a lot of quarters this year, and you want to -- doug mcmillan should have been we crushed -- no, he doesn't do that. instead, he comes back, we're doing well, his humility does not serve him well four times a year, and i have to laugh because all of the people in retail are like that
craig rainier, the consumer may be rethinking -- i don't want to hear from anyone at home depot that the consumer's traveling and entertaining i don't want to do that. i'm willing to have it from rh, the old restoration harbor, but i've been parsing calls. you don't want to hear from him that the consumer's doing travel and entertainment and then from gary and kelly that the consumer's not traveling. >> just to throw tjx in there quickly. comps now open store comps tracking up mid-teens. prior quarter up 20. does that mean maybe we're getting some moderation in the in-store traffic >> i don't know. i mean, they have -- i took the words down because it was so important. this is what i wanted, by the way, for craig and i wanted this
by doug mcmillan at walmart. they say the performers of our home businesses across all of our divisions continue to be phenomenal i want the word phenomenal used when it comes to home depot and walmart, and they didn't give it to me in either. this tjx is basically with comps up 20% on the stores that are open i went to the tjx down here recently, and it's packed. that's anecdotal, but can we just come to a conclusion that retail's pretty good. >> at least apparel, right >> they're talking about apparel tjx as trends up, target sounded like apparel's great i would love to hear from best buy, which i think is actually having a fairly good quarter i do think in the end i look at these stocks, i'm going to compare these versus the drug stocks everyone likes the drug stocks now. you see j&j. walgreen's pulls the darn vaccine and the stock goes up. people want that group because it's cheaper and it was put down by fears that biden was going to
go after drugs that's not happened. people don't want this group, i think, to some degree because it's like can i have something that's not up 44% for the year brian cornell is fighting his own expense. >> speaking of the virus, the white house is expected to officially call for a third vaccine shot for americans who were fully vaccinated with pfizer or moderna as the u.s. reported more than a thousand covid 19 deaths yesterday. this is going to get interesting. we'll find out what exactly is interesting about eight months on the booster and whether or not these breakthroughs especially in nursing homes. >> i'll give you one thing about the eight months i went out to a very nice restaurant yesterday and i had to produce my new york state wallet in this state we have this and it expired it expired. >> because you got your first dose early. >> i got it too early, and so now i'm thinking it expired on
midnight august 9th. well, i'm not saying i want to be able to go out to dinner that's not the point, or i can get into my restaurant, because that's not the point i am saying we're all getting these things where we're discovering that our vaccine, at least in the eyes of new york state is not working, so do you mind if i listen to the president and go over to walgreen's today and say, hey, listen, i've got this. the president says this. i'm concerned that everything i have tells me i'm losing in this battle i'm down to 55% according to the pfizer numbers in israel so we're all faced with the idea -- anyone who got it in january and february is expired. >> there was an israeli hmo on the tape this morning that said that the third dose of pfizer, 86% for people over 60 because israel is doing a lot of boosters now. >> right they also keep track there's a lot of criticism in which dr. gottlieb has been the leader that we've now devolved
to state versus state numbers because the cdc no longer releases numbers they had six states that we were looking at that's kind of a sample because there's 50 of them last i looked we all kind of are getting one thing. if you get the booster, get it because the fda has not approved these for regular use, you need a prescription biden is directly contravening what a doctor's allowed to do in this country so what happens? >> hopefully we get that cleared up today we are doing a million a day, vaccinations, highest since may. reflects concerns about covid b u the pace of the increase continues to decline we expect covid cases to peak around this weekend. >> gottlieb said it was going to be this weekend. he said two weeks ago it was going to be. we're obviously not seeing that yet. i made some calls in the auto business, and auto business was
incredibly strong last month, so that -- if retail sales, you can say wait a second, jim, of course people moved. i think what happened in july is not what people are talking about in terms of fear of covid. i think it was that we got the word that we may not have to go back to work, and so suddenly people are saying maybe i got to change my m.o. here, but do i change it and build that office or not in the home, so i think the real -- i think the thing that really threw us was we don't know where we're working come september that is -- i mean, for anyone who's worked -- i think that is what's freezing people not necessarily that we're all thinking we're going to get covid. >> that's a really delicate point to make getting into consumer psychology. we'll take a break here, futures moderately weak, of course, as a lot of news regarding cannabis and tilray, we're talking some analog devices in semis, morgan stanley's katie huberty on apple
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gave us saying, hey, listen, we're going to be back with what? with the eighth army, the chinese eighth army that built all those bridges in 1952? i find myself thinking the turmoil in china is not being covered enough they have companies that they're reining in, companies that they feel like are making too much money. you see the stock going down every day. and apple just continues to chug it's a 5g juggernaut, and it is loved. now, remember, when you talk to apple about china, it's made for china by china starbucks too. nike, starbucks, apple, are mainstay employers and they are not considered to be brigance. they are companies that have embraced china and are trying to hire as many people as possible. i don't think the chinese government is totally irrational right now they're trying to figure out whether or not to approve the masks which flew
over there last week, made me think what's going on. you're looking at the three companies that have navigated china, and isn't it interesting they are the ones that are at or near their house. >> that's an excellent point certainly the chinese companies themselves have not fared nearly as well. this comment by xi about common prosperity that the wealthy need to give more back to society, curbs on, quote, excessive incomes. the language is getting more spic spicy over there. >> those of us who are old enough to remember when joe and -- kind of took charge of the narrative in china, knows that what he was trying to do is make it so if people really did well, they could start accumulating wealth, and the capitalist roeder contingent won out even though they had become chastised by the mao contingent. mao was a dictator who demanded dead people had equality and made it so that people are equal
and could never envision a capitalist government. is xi a return to mao. he doesn't seem to be the logical heir to joe. >> he's trying to undo what den show peng did. >> listen, we're not going to be mao, and peng was capitalist. >> absolutely. then i started thinking, i don't think he can really be m aao the fact is i had to dust off my books when i was studying chinese communism in college, this kind of like mao to joe, to deng show peng. >> for him it was personal about what happened to his father when he was forced out of the party it's shakespearean. >> i think you are closer to anybody on what you just said. i don't think people realize this is a tectonic shift in
china. this is not about soil this is where the lineage is now. that's his legacy. >> over the long-term, it's important to keep an eye on. cramer's mad dash coming up as we get closer to the opening bell in ten minutes. once again, retail the name of the game, but futures consistently weak this morning, we're back in a moment hey lily, i need a new wireless 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.
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peaked, and if the country's peaked, then it's going to be nucor that does the peaking. why? there are people using a very big down year in 2022. the credit suisse recommendation is you can buy this up to 142, will be down next year, but this time it's only 11 going down to 10.50. no portfolio manager ever buys the stock that's going to be down we'll talk about this maybe on the judge's show at halftime at least it's not down in half, which is what the street was thinking. >> vhp's comments about iron ore prices if china really slows does that impact every material name or not? >> no, because fortunately nucor uses recycling it does impact cleveland clinics, which is iron company, but nucor has got that fantastic -- i went and visited their place in louisiana, fantastic recycle model. they'll be fine. they have rebar. they have auto they have oil.
they are the best manufacturer this is the stock you need to watch. this is the stock you need to watch if we are going to slow down and right now a lot of people feel that this is the battleground, not gm, not target, because if you're going to have an infrastructure bill, then next year's going to be up, and if you don't, next year will be down and no one's going to buy any cyclical. >> really quick, does afghanistan and potentially weaker white house standing put the infrastructure bill at risk, right? that's the debate going on are right now. >> that's very interesting because maybe that's the president wanted drug stock regulation at one point. maybe there is a president -- a weak president theory that kcoul also be percolating. i don't like to do politics, but i do like the idea that washington's hurting everything, not helping anything. >> we may find out more, he's expected to talk to abc news tonight 6:30
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minneapolis fed president neil ckashkari saying kcrypto i 95% fraud, hype, noise and confusion. we know he's been no fan of this space. he hasn't quite gone there before >> i have to tell you when you look at the coinbase numbers, the percentage of people who are using or have tried this would tell you that kashkari is way out of step. is it fraud, is it used for ransom, absolutely is it also being used by people that visa are facilitating, yes, is jack dorsey a total outlier no when i listen to -- incredible
interview andrew ross sorkin did. that was an unbelievable interview. he did not mince words about how he feels about facebook, but i feel like that this is a reaction to the printing of money endlessly, and if you lived in zimbabwe in the previous era, you would want this, and we don't want to be zim zimbabwe and i think that people are basically saying you know what's really going on here is i want an alternative and gold ain't working. i had dr. mark bristow on. he's an kplexcellent ceo and he said we've been the repository of the storage of wealth for thousands of years, yeah, but yours doesn't go up, chief >> well, we have been watching palantir bought $50 million worth of gold. >> yes, yes. >> also, i think one of the least appreciated headlines of the week was walmart hiring a cryptocurrency expert.
>> thank you i thought that was incredible because i think what's going to happen is people are going to demand -- and it's really been ethereum people are going to demand that it's accepted. you don't want to turn down sales. now nvidia reports tonight, nvidia has not -- they make the most powerful cards which have been used by miners. they're only giving the minors the ones that aren't even acceptable for gamers. it's not how nvidia makes its money, those who are trying to trade it, that's a big mistake but the fact is this thing is being used worldwide, and you can't fight it you can't. i mean, you may decide -- you may think it's fraud or you may think it's tulips but enough people are involved in it that you're fighting the tide of history. >> escape velocity and acceptance in that sense at the big board this morning,
we do have the realtime exchange advisories celebrating the third anniversary of and the lidar company begins trading after completing its spac merger. >> lidar, you you're talking about -- i keep waiting for mobile eye. >> you say this every time. >> mobile eye is, wh working it's driving around jerusalem with no people, and we have investigations of tesla. we're not hearing investigations in israel of things going wrong. i always felt that the mobile eye acquisition was brilliant. i've had those people on several times. they're winners. i think ford could have something. when i think lidar, how many companies are lidar. there was a friend of mine who's doing a piece about -- for the "new york times" about charging stations and i said, look, i was talking about the best ones, but there's four of them charging stations and lidar,
dime a dozen there's just too many of them. there's too many of them >> interesting we'll see, it 's a long way off. >> you mentioned nvidia. we've also got analog devices, jim, 172 i think was the beat, revenue ahead. they did guide above for q4, but in general the weakness in the semis is one reason why some argue this dip is not viable >> the weakness in the semis, analog is really very straightforward iot. this is industrial things so to speak, and you know what we're only going to have to wait until the end of the day when cisco talks abilout it they're number one i think analog is a great company. it made some acquisitions. this group faltered the moment that sky works reported. people are telling me sky works chart is a living hell sky works very much apple and i find it counterintuitive that
sky works is going to be down and apple is going up. qualcomm reported a great quarter. like this group, and i would not be surprised if you look at analog gdevices a few days from now and it's doing okay. texas instruments was supposed to be the end of the world the last they reported, hasn't done anything. >> they displaced tencent and we can guess why. >> one lives in a democracy. taiwan semi, i don't know what's going on if i were there, but i think they're working 25 hours a day. they are meeting the obligations of the autos so those who keep saying that the autos won't have the supply i think come september, october, they will. >> that would be huge. >> because of this company and the only reason why right now i believe dpgm is down 50, they're very tied into a malaysia factory system that has much more covid than taiwan. >> and port closures in china have been a problem in the last few days viacom and our parent announcing sky show time, a new streaming
service that would launch in select european markets. jim wells takes viacom to overweight saying credit where krit is due. we've been bears we saw streaming as a show me story, and they have shown us their forecast for the s vod and a vod users. jim makes the recent long-term guidance appear beatable. >> paramount plus they praise. i think it's interesting that disney is back to where it was before that phenomenal quarter as if it didn't occur. i'd much rather own disney than viacom. >> morgan stanley makes disney and netflix a top pick for the second half as we're hanging onto 175. >> let's say you do get the peak in delta and it happens saturday >> i'll take sunday. >> saturday before the best preseason football game, what you'll have is everything that they're selling right now they're going to be buying i am ordering people not to be
whip sawed if you're in disney now, wait until monday i mean, you're selling something that -- people are selling disney don't seem to understand if there is covid they have plus, and if there isn't they have theme parks with viacom, sure. i like the idea of a comcast i'm sure people could say maybe this could be a combination. we don't know that, but i just -- i guess i'm kind of overcome with how negative everybody got quickly off a couple of larger numbers in fear of fed, and i was listening to brian this morning and someone said it's all in the fed since 2008 it's all in the fed, and i'm thinking like really since 2008 it's all in the fed there's companies that do well do they matter is j&j 170 because of the fed? no, we have companies doing extraordinarily well if you go down and tell doug mcmillon, you know why you're doing so well? jay powerful by the way, i complained about
my walmart and how sloppy it was, the fishing equipment, they were like tell me where. >> i have no doubt >> your point about the fed, powell yesterday saying it's not clear whether delta is going to have important effects on the economy. there's a headline this morning that basically says the fed has no idea where the economy is going right now. >> you ought to bring gottlieb in i wouldn't bring in the cdc because they also have no idea i was looking at the johns hopkins site today, it's much better than anything the cdc is putting out. i think the idea that you have no idea is pretty on point i would go to american express, which i think has the best handle on actual day-to-day, and another one, i mean, we're doing the -- we're dealing with situations that are so minute to minute that tomorrow when we come in and macy's isn't good or is good skand suddenly we're gog to say things are better consumer's fine, if the fed does taper, that's fine most consumers won't realize it.
if delta really gets worse, i think that people are going to change their view. they're going to get letters from their bosses saying don't come in. i still think the reason why jay powell, why i'm against this idea he should talk taper or not. it's really in the hand of the medical community and the public health community, and they're very divided right now they don't know what to do >> it's true one point that tom lee, who has been calling for an everything rally points to is that the vix is not surging to multimonth highs here, jim. in fact, we've struggled to get anywhere above 18, 19, right it's not -- we're not doing 20s like we were last year >> no, we're not that would indicate that when they're going in opposite directions, you're okay here i continue to think you are okay i just think that we're -- i mean, people keep talking about the 5% decline that we have in ten minonths. if you're in certain stocks, you've had 10%, 20% decline.
it's a vicious rotational market i can't be as bearish as so many people who come on our air do i want the everything rally if i want to stake out -- when you're watching sports, these guys, taking big time over, i like the idea that things aren't that bad they didn't suddenly stop. >> right, right. >> it is true, though. a lot of my friends. jim, do you think i'm going to the office there's a lot of -- do i look like i'm in charge of jpmorgan thank you, thank you, yeah, sure jim. what do you think about my going to midtown i do it every day. >> that's the problem is just your -- like when i got -- yesterday when i was scrambling at the restaurant to prove i'm okay these are all new things these are all new things, and they are worrisome
that does not keep people from going shopping >> it's true or from gaming want to talk to you about roadblocks, speaking of whip saw action, up 2% today, and jim did talk to them last night, take a listen >> this quarter that remember where our community was a year ago, they were all locked down, it was april, may, june of 2020. our heart goes out to our community and all the people who struggled through covid. we come back in q2 of 2001 with really amazing dau growth numbers and amazing bookings growth and then july as you said was just small >> so that sort of makes the decline yesterday seem a little suspect. >> roblox is up. this is a 15-year-old company. the question for roblox, is when kids come home for school will they play it after they do their homework right now they're playing it heavy. july might be the outlier.
i am a fan simply because it's a platform, and you know what word i'm thinking about. >> yes, i do i do. >> what is it? >> metaverse. >> jim, you know the metaverse better than others, oh, my god, does that mean i'm a joker i mean, facebook is metaverse and cathie wood is metaverse. >> we had matthew ball on yesterday on tech check who runs a metaverse etf of which roblox is a giant -- >> talking about classical music and how they felt about mozart, and he didn't disagree that couldn't happen. >> you got bands doing concerts on the metaverse, jim. >> right now, right now that's happening and in the future the world that i'm imagining is going to exist for everyone on metaverse, and i think that that's what -- if you go look at
zuckerberg's last conference call, he said he's more excited about metaverse than anything he's ever done and tonight nvidia's going to be mentioned. their chips allow for the metaverse. i first heard about it from the ceo who was talking about me about going to the party and all the people i had made up who would tell me how great i am >> i'm glad you mentioned facebook i was told zuckerberg is scheduled to be on socbs tomorrw morning and i wonder if he's going to try to make the metaverse a broad topic of discussion he's tried on conference calls maybe this is a new push. >> i really want to hear, speaking of metaverse, i want to hear what orion says if the metaverse -- right now it's music if the metaverse is what i've described it as, and no one's disagreed with my position, i
don't think any -- roth cowith rembrandt and saying do you like suzanne more than you like matisse. when i was at nvidia, genjensen huang, he didn't do -- tech t tokic shifts of what he was doing. it's all going to happen in three years, not 30 years. >> that is amazing >> i'm going to be a hologram just exactly what elon musk said >> he was right the whole time. >> maybe i am a hologram >> i don't know for sure >> i think david's poked you before to make sure. >> well, david -- i think matt from "jeopardy!" turned out to be a hologram. >> i do want to get really quick while we have time on cannabis, ti tilray, basically a bet on longer term u.s. legalization. does this make sense to you? >> well, everyone else that's tried to do that has failed, canopy if you say that irwin simon, i
love irwin irwin's buying a senior security debt in order to get the collapse med men, which happens to have some stores in great places everybody seems to want to play cannabis the same way they want to do gambling and remember so many companies that do gambling and i just feel like the time to do cannabis, to buy those stocks was about three years ago. right now you need something in congress, which just says we like cannabis and it -- you're not getting it the fact that sun dial growers you know if you've seen that one. sun dial growers is something that if i were gary agagensler, this thing is a $0.72 stock that trades violently every single day, and i want to know what's going on there it's a penny stock that is a meme penny stock they can't seem to be getting going. if you take a look at that, that's a totally suspect security
every time i ever mention pot, which is what i call it instead of cannabis, this thing traded 7 million shares and it's 9:43 >> yep and there it goes. overall, dow moderate losses down 90, and we're hanging on to 4440 let's get to bob pisani. >> the delta variant still weighing on the market you can see this effect on the cyclical sector. take a look at what we're seeing today, earnings great for some of the big retailers, but banks weak, energy weak, industrials there's your cyclical sector there's a growth holding up okay, tech continues to hold up despite these concerns about the delta variant. a lot of peak everything stories out there. target is getting caught up in the peak everything story. this is what it means. take a look at the revenue growth here for target you see 78 billion in 2019 look at that huge jump up in 2020 there's the big push up that target had and had the same
thing in earnings, 2021, still up you see 2022, a lot more moderate this is the peak everything story. it's not that everything is wrong with it. in fact, the numbers are good, but the rate of change slows dramatically it's the same thing for the earnings situation their rate of growth in their earnings next year is going to be slower, much slower here's the big problem nothing wrong with target. it's up 44% so far this year it's way out performing the s&p 500, put up the stock chart there, and it's 21 times 2022 earnings. that's very high for target. look at how much it's out performing it should be target up there the important thing is 21 times forward earnings for target, and now you've got a situation where it only trades historically at 15 or 16 everyone's saying how much better could it possibly get the guidance was pretty good see target outperforming there maybe the multiple is justifiable because they're giving better guidance i don't think so the earnings are still up but
not so dramatically. as for the delta variants in the stock market there is evidence it's starting to change consumer behavior. there's a little bit of a global story here associated with delta variant changing consumer behavior the big question is how much will it change the second half growth assumptions when are people going to come out and start talking about that the problem is we don't know it's really too early to make those kinds of changes right now. although we can see the trajectory in where it's going as for why the stock market is at record highs, we're having huge problems with the delta variant. this is why, we have record earnings, $52 for the second quarter. we're going to do north of $200 for the year that is an all-time record it keeps going up through the third and fourth quarter profit margin 13.6 they're historically 9, 10, 11%, 13.6, heavens.
this is why the stock market is at a new high. record earnings and record profit margins as for the end of the second quarter, people are still standing around with their mouth open they were just astonishing, 88% beat, 87% beat on sales. you saw these numbers many times, and the important thing is they beat by 17, 18, 19%. normally they'd be 3, 4, 5%. q3 has low expectations. they're going up if they're not going up very fast they're going to beat the numbers again. they're going to likely beat them in q4 that's the best thing the stock market has going for them right now. fairly low expectations. they're going to keep raising these numbers. people are underestimating the extent of the economic growth. carl, back to you. >> thank you we'll take a quick break here with stocks down about 71 on the dow. watch the bond report as well. we'll see how treasuries are
robinhood set to report quarterly results after the bell for the first time since going public and we're looking forward to seeing some metrics >> i think so. i want to caution people remember what happened with the ipo? remember what happened with amc after they reported. they're more powerful than you if you don't like it these are the mean people. i think they'll talk a lot about what they're doing in terms of safety, in terms of broadening crypto talk.
there will be talk about the wallet and i think you're going to end up doing wait a second, are they going to be the next paypal and that's something people are going to want to own when you get in a situation like today, where you have stocks that are down, like a home depot. those could end up being key robust consumer, who's not just 22 and is expanding into other areas of the finance world the mean people will take it higher >> oh, yea i wonder if we're going to end up using their quarters as tell tales for broader activity, right? >> that's what i'm saying. let's say they're 24 million strong, the app still controls things i think vlad and the cfo are more prakessed than they used to be
i think cfo is really smart. i think it's going to be an education call, and the memesters will support it all the way. >> that's the long-term positive that we're definitely hoping for. better equity participation overall. at usaa, we've been called too exclusive. because we only serve those who honorably served. all ranks, all branches, and their families. are we still exclusive? absolutely. and that's exactly why you should join. 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
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it's time for jim and stop trading. >> sales force unmovable stocks was $8 in 2007. we got a note today from jmp saying there's chatter of very big deals. they're taking their price target to 320. do they know something others don't? when i hear big deals, it gets me excited dow stock hasn't done anything ia say to yourself what happened you seem very volatile, exciting stuff. jmp says it's going to be volatile and exciting. so, that's a big change for next week and i just like the tape. >> behaving in a way --
>> this is a lowe's tape marvin's on today. the stock's up 16. listen, he's reenergized in a way we haven't seen since the old days and they are the green hydrogen company. i believe it's the future. and there are farm's dealers that make every kind of -- i wish he would buy his company, because it makes money no one's shooting against it >> great show. we'll see it you at 6:00 as jim said, s a&p's gone green. . and it's fast. if i could, i'd ten-x everything. like our lunch. (laughs) amazing! see it. want it. ten-x it.
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middle >> we're 30 minutes into the trading session. here are three big movers, in the meantime, that we're watching after striking a deal to buy $156 million in debt, giving tilray a pass to enter the u.s. market shares are up 2.5% right now and vaccine makers giving back recent gains, despite the fact that the biden administration is set to unveil a covid-19 booster program soon and apple hitting an all-time high, hovering around 1% below what would be another record the key record to watch, 151.68. as you can see, shares are down fractionally this year, the retailers reporting results as well. we have new numbers from lowe's,
target and tdx this morning. >> so, target, lowe's all beating analysts expectations on the top and bottom line. they're not as eye-popping as the comparable pandemic quarter last year. it still shows further proof that the u.s. consumer remains quite strong look at target sales, grew 8.9%. digital sales grew 10% stronger growth on both metrics. but well below last year's pandemic-fuelled quarter, to be sure lowe's comparable sales fell, digital sales grew 7%. the first decline in comps in eight years for lowe's but better than had been expected for the retailer. and it's worth pointing out that h home depot's sales out performed
lowe's and they've beaten lowe's more recently in six of the last quarters but not this time not this quarter home depot came out on top tjx giving only total comparable sales on a two-year basis, up 20%. and tjx says so far third quarter sales are strong, very vaung. but due to uncertainty, it's not giving any guidance. and they saw strength in aperil. similar to home depot, lowe's saw improvement in the pro shopper. i was able to speak to the lowe's ceo before the earnings call by phone. he said we're extremely optimistic on the long-term outlook for home improvement the industry we believe our consumer will continue to invest in their home he said further that inflation is responsible for some of the
seals increase about 400 basis points home depot said it was responsible for about 420 basis points something we need to watch as we move forward back to you guys >> courtney reagan, thank you. we're going to turn to the broader markets. and we do see both the dow and s&p move back towards the flatline when uncertain times, that was part of one of the quotes that courtney reported on there how do you see that through a mark perspective as we move through a second quarter batch of earnings, but now there's question marks and uncertainty whether the consumer-focussed macro data or, of course, delta variant and inflagsz >> at oak mark, we're value investors. we look at long term, how much cash flow our companies are capable of generating.
we're pretty confident that three to four years from now, you'll remember the delta variant. we might be on three greek letters from now vafriant. but we think, generally speaking, human ingenuity will win out and cash flow will approximate what we consider to be normal. obviously comping at the 2020, i mean, that was as weird a year as you can get so, we kind of like to look back at 2019/2018 to see what the trends are >> in light of that, you did have a very strong past year in terms of the funds performance q2 basically in line with the s&p. it does seem like a real mix between the growth-tech focussed names and some of the value names. is that the strategy you continue to move forward with?
>> yeah, basically every company is worth something and we try to buy the ones selling at the biggest discount to the estimate of value you look at the 10-year yield and it's one and a quarter you're basically paying 78-times cash flow and it's not growing you can buy real estate for -- rent is 1 to 4% of the purchase price. so, you're paying between 100 times for real estate. the s&p is trading at 22 times earnings that's a pretty good yield compared to alternative. we're finding companies with enormous cash-flow yields that we like. >> i want to get into some of those names, for sure. but to touch further on the financials the fact you do have a number of banks and financial services names so heavily weighted in the portfolio.
is this a play on the fed beginning to tighten or something else >> we actually think these businesses are being viewed as more risky than they are we believe five years from now, if you said it's going to be higher or lower, the i think the odds are it will be higher generally speaking, we think the cash flow they producing are undervalued. the companies are extremely well capitalized. the fed stress test essentially bring us back to the global cancel crisis and companies were in fine shape, even in those situations we think they're going to take money to shareholders. >> you talk about delta being a distant memory i remember miller saying if you're biing airlines, you're
betting on a vaccine have buying now a bet on walk nothing the office and getting a news about something that would make this livable on a day-to-day basis >> honestly, you shouldn't bet against human ingenuity. you can predict the end of the world twice and you can't brag about it afterwards. the speed to which vaccines and therapeutics have come to market, unbelievable and it's in everyone's best interest to continue to innovate in this regard we expect this will continue to happen and the economy will adjust to the new normal whether that's masks or handshakes or business as usual. the snapback in restaurants and leisure travel demand, i think,
indicates that people's behaviors are not really going to change. >> that said, it does look like you expanded your position with regen ron, as we see everyone from governor abbott with a covid case, getting treated with the antibody treatment and it being proposed or propped up in places like florida as well, amid higher case use is that reason for the increase in investment there? >> the funny thing is we invested in that company a few years before covid, on the back of their incredible genome sequencing science that allowed them to move quickly to handle emergeant diseases and cancers and things like that and then, during 2020, it turned out they were a big -- their
capabilities, which we'd invested in, turned out to be super helpful against covid. the stock is one of our best performers and we sold the preponderance of our position but not out of it. and you see we've added quite a bit and that's because, after the vaccines came out and recovery stocks started to work, regeneron performed enormously we're still getting their science inexpensively. and it will prove useful in ways we're not able to predict, like covid, but we think it's a good platform >> i wonder -- it's been a while since we've talked a lot about big cap, regulatory risk does capitol hill, do regulators have their hands full now? i wonder if you think that is fading, even at the margin >> so, i've got to ask whattia
think the odds are capitol hill is go took createanything significant in the current environment. that said, when we look at the value of alphabet and facebook, we see a lot of things they're spending money on that are obscured by the complexity of the companies and other bets that are currently not earning revenue, that they're spending r&d often. we think they're undervalued as their current entities but if, for some reason, they were broken apart, we think all there's a lot of value in other assets that would be expose said >> we appreciate your thoughts as we head to a quick break rk here's a look at our road map the rest of the hour tesla shares having a wild ride.
key technical levels of stock too. that's coming up >> and veteran cashin plus a lot more on today's biggest retail movers names like target, lowe's, tj max. 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.
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inability of the autopilot system, after they announced the investigation on monday. joining us is new street research talk about the investigation and the longer term fundamentals. pierre, welcome back good to see you again. >> before we get to the longer term model and competition, what do you make of it? are they overstepping here >> so, no. i think, you know, tesla is being very innovative, very aggressive in the ways they're innovating autopilot is the most innovative feature. tsa, that's their job to probe and evaluate things, accidents and figure out what could be wrong. i think it's hesitant to see things happening
i believe they have investigations going on at the same time and that they're seeing things that happen at every car brand. so, seeing tesla be top of the mix and seeing tesla being probed on what is the most advanced area of that technology makes complete sense when on the stc, the idea of the stc investigating, you know? i think we're in the thin line of being excited about the new technology and talking about food what we have to remember and what tesla is very clear about is that this technology has to be supervised by the driver. so, if you agrethat tesla is communicating that properly, then everything they're saying
about the capabilities of the technology [ inaudible ] but what we have to remember is tesla is saying the technology has to be supervised >> understood. one of your main points is that you believe tesla is years ahead of the other legacy oems on efficiency, oebs you do not worry about competition. we've heard so many amid the wave of competing models tesla's under the gun. >> you know, maybe say sell a car that k competitive, on paper w what tesla is selling at a similar margin if they can do that, then i
think the gap is filled up and narrowed down to nothing but today, $35,000, $45,000, to take another excelling price and it's slowly heading to 30% and when you default and others, putting into the market electric cars, like on a similar size, these cars are sitting for at least $10,000 more it was $15,000 more. and i think there's a work consensus that this job is making a very low entry-level margin that's the situation today and then, what we do is look at the -- sorry go ahead >> so, given this entire conversation and what certainly
seems like lot of information and perhaps even, at least in the near term, uncertainty around tesla and how it fits into the broader market. your price target of $900. market technicians will point out that we're at key levels for the stock. i know dehad a crazy strong run in 2020. what's the catalyst for this to break into the upside? >> good question it's a good question if you look at people who are constricted in the market, the two things that matter are, on one hand, the new batch rate and that something that is going to take some time to get together but we have positive news flow
boupt coming online. and so, continued imp prove -- improvement in the competitive environment. and the second thing that's import pont is the fact that the company has deployed the software and they're working hard at improving the technology andfl trying to work harder. so, anything that. happened are really what gets the break through. so, that's kind of like the news then you have technicals expectations of tesla, at least i believe in, my team believes, are very, very low for 2022,
2023 and we expect very significant earnings revision every time tesla reports because they're going to continue to improve. tesla doesn't have competition demand is very strong. so, they have a lot of flexibility in pricing and then the stock will go crazy again. >> the dog fight, regardless, is going to be fascinating to watch. good to see you again, thank you. >> well, we've got more market action ahead with the s&p trading higher and the dow right at the flat line what happens when we welcome change? we can transform our workforce overnight out of convenience, or necessity.
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action, we're joined by floor operations, arthur cashin on the phone. great to talk to you here we are again, circulating around 4050. you've been writing about these narrow ranges as not what veteran traders want to see, correct? >> that's correct. you have essentially what looks like a paradox, almost a relentless series of record closing highs. 48 or so in the s&p. yet the mark doesn't have that birth to it. seasonally we're due for a pullback that hasn't shown up either. so, traders are perplexed this morning after the two-day sell off, we had some of the chat room bears going around, pushing the fact that we had a
back-to-back occurrence of something called hindenburg ome and deals with the relationship with 52-weak highs and 52-weak lows and the bears say we've never had a crash without a hindenburg omen. but conversely, not every hindenburg omen brings a crash >> one of the bearish arguments i saw this week is small caps and semis, that any pullback is hard to call for a strong pullback because the action on fang plus is so hard to read and you would need that to collapse a bit to bring you anywhere below, say, 4350, 4300 how much of that is a buffer a cushion, the action in mega cap tech >> there's an enormously heavy waiting of the industry.
they're waited by their value within the index and because they rallied and rallied and rallied. they've become more and more important. to it. so, the premise is they're now such a big part, you can't really move the averages around without cooperation from them and that's true but inili its on way it's a mildly technical factor an evident factor, anyway. >> it's morgan i'm seeing a lot of commentary across the street right now in the central bank of new zealand's move, announceing it did so because of the recent government lockdown that was literally based on a handful of covid cases in that country. what's the broader read through to the market right now on a day where we're waiting for fed minutes, which i realize are more backward looking but speaks
to the push/pull between the covid and the inflation growth debate >> obviously, covid is very important. new zealand case proves it's a bit more important else wear in the world than here. that's hypersensitivity to have between one and six new cases and virtually shut the country down for three days. but the link between covid and things like monetary policy was imminent by what you said. bank of new zealand said people are expecting us to hide you had powell yesterday talking about the fact that the new delta strain was yet to be tested, begging for time, saying we don't think we want to make a precipitous move until we see this you have everybody hanging in
there with covid this is a clearly unusual time for all of us. >> i wander what you make about the debate about the consumer. the worry out of retail sales last week is the delta is really starting to weigh on all of our minds. last night, j.p. morgan sedser says amazon prime day was in june ought so shortages were everywhere you have target coming out and saying consumer's resilient. i wonder if you think thaltz a bit of a reach >> it is but we're seeing another confusion. talking about trading and shipping blockages and yet japan announced exports are up 27% again. s so, it would look like world
trade is moving but china shirtdown the third largest shipping porlt in the world. these things are intermixed. but they would appear they're shifting their sights from things like unemployment numbers to the amount of new covid cases. it's one moerp complicating factor to look at. >> we'll see what minutes may say about that always great to have you art cashin on the phone. we have news on the biden administration's vaccine program. >> well, the administration is saying it's prepared to offer booster shots for all americans, beginning september 20th they say that will take place eight months after an individual's second shot so, rolling forward after
september 20th, they say the booster shots will be available for all americans. those getting the first booster shots will be those. they've been looking at the science and there are indications the protectiveness of the vaccines slows down over time so, the booster shots may be necessary and they say in a statement that they've begin -- they developed the plan to begin offering booster shots this fall, separate from fda conducting a safety and effectiveness of third dose of a moderna vaccine andish ug booster done o dose recmanation
and they also say, for those who got the j and, j vaccine, they'll likely be for people who need the vaccine that will be a lagging one but the pfizer and moderna vaccines a lot of us got early in the year, they're prepared to offer the booster shots as well, beginning september 20ing. back to you. >> right perhaps not surprising to see a mixed picture, given the fact we did see names like pfizer, moderna, in anticipation of these news are they going to fall under programs already in place? >> that is the expectation they're talk about offering these to the americans from the federal government
they're siting the delta variant as the need for the baser shot we weren't able to kill this virus out of the public kaungs asness altogether with the first round. now we need the boosters and how many more are we going to need? this is thing they can get when it's prp -- and they say you just don't knead another booster. that is subject the rete of the spread of the disease and american pollak its. they are saying the third sthautsz will start to become available by september 3rd >> we'll keep an eye on that incredible the fda has an acting commissioner, given everything we've seen growing on and continuing to go on.
it is time for a news update >> at least one person has been killed and six others wounded whether the taliban broke up a protest. dozens had gathered to raise the national flag ahead of afghanistan independence day meanwhile, an emotional scene in germany, where some evacuees arrived earlier today thousands of diplomats and aid workers have been evacuated and this as the dixie fire continues to burn near the california/nevada boarder. it's about 61% contained and the first outbreak has grown to seven people. that's after the government
earnings continue for retailers. and target and walmart fuelled by back-to-school spending joining us is oliver chen. great to see you again talk me through results we've gotten so far and specifically let's start with targ lt, which i know is selling off despite solid numbers this morning >> great to be here. we're encouraged by target's results.
consumers are coming back to stores they're better than expected and traffic was a big factor, up about 12.7%. the story for retailer is plus clicks it's about bricks and reusing stores as hubs and fulfillment centers, as well, as the environment continues to evolve. they both have solid prints. the consumer is in a good position, based on what we're seeing categories like apparel and other categories are working as consumers look to experience things with other people and dres up again. >> and this headline, i think from "the times" that amazon eclimsed walmart to be the largest retail seller outside of china, which highlights the
switch to online shopping. the growth is slowing, to your point, as more people leave and actually shop in stores. just in terms of, i guess a reminder, from an investor standpoint, what's more profitable for companies and is it good news d spite the fact you see a slowdown in the e commerce shift buzz is it good news >> it is good news and bricks plus clicks, chopper shop online and stores the big problem with online is fulfillment costs, when you deliver goods. however, walmart and target have done a great job with curb side pick up. that off loads the last mile to the consumer that's been helping relieve a lot of fulfillment costs it's a real positive
but in this day and age, you have to offer all solutions the customers. and it's very fierce about 90% of the population live within ten miles of a walmart and 70% within ten miles of a target using them as a pick-up point and target and walmart offer of you veer a kplaer value, as returns and amazon's down 500 bucks in a month i guess on this notion they're starting to see shares get stolen from other players you mentioned. but then youlook at what their growth did in eq2. who's right? >> i think the future of retailer is going to involve
physical and digital and retail ecosystems. for example, walmart embracing health care, payment methods and technology and having an e commerce marketplace it will be a fight to offer the customer the most convenience. target has differ engsiation and walmart will be an every day low price leader, offering clooer value. the generic rely on drug is one example. so, they will compete on different terms as well. >> i mean, we've also gotten results from some of the online secondshand platforms as well. they haven't been particularly strong or well received by investors. we have a lot of names, in the fashion space, specifically. how do you bammance those two?
>> we're really encouraged by the circular economy and what we're seeing where people have too much stiff and they're doing more with less and rethinkingatems in their homes to sell and resell we like models like posh mark and real, real we all have items in our closet we're not using. so, we see them really valuing sustainability these models will apply a lot, particularly in apparel and fashion and as we think of the uberification of retail and retail as a service and goods as a service rkt that's a major structural trend that's happening. they're aware of sustainability and goals. and this is an important part of a new product innovation, as well as rethinking supply chains
there's going to be a lot of inovation in the sector and what you're mentioning. >> the uberification of retail haven't heard that before butyism going to start using it. >> meanwhile, china stocks continuing their sell off. the latest as the crackdn ntues.ow stay with us no dad, it's a video call. you got to move the phone in front of you like..like it's a mirror, dad. you know? alright, okay. how's that? is that how you hold a mirror? [ding] power e*trade gives you an award-winning mobile app with powerful, easy-to-use tools and interactive charts to give you an edge, 24/7 support when you need it the most and $0 commissions for online u.s. listed stocks. don't get mad. get e*trade and start trading today.
the s&p 500 has doubled since it's march 2020 closing low. a couple of names have performed even better. those names and which are just getting started on cnbc.com. nt. here's andy listening to my goals and making plans. this is us talking tax-smart investing, managing risk, and all the ways schwab can help me invest. this is andy reminding me how i can keep my investing costs low and that there's no fee to work with him. here's me learning about schwab's satisfaction guarantee. accountability, i like it.
so, yeah. andy and i made a good plan. find your own andy at schwab. a modern approach to wealth management. you packed a record 1.1 trillion transistors into this chip i invested in invesco qqq a fund that invests in the innovators of the nasdaq 100 like you become an agent of innovation with invesco qqq time for etf spotlight china's showing some life today as the regulatory crackdown copts. kweb narrowly in the green that said shares down more than
50% from the all-time highs in february and on pace for a sixth monthly decline in a row and alibaba hitting the lowest numbers since october of 2019. shares are down almost 25% since january alone. >> airlines, meanwhile, coming under pressure as well, as covid-19 cases and deaths continue to rise due to the delta variant. tsa continuing their mask mandates until the rest of the year phil >> morgan, we're not seeing much reaction from the airline stocks today. they continue to be under slight pressure but we've seen that for a couple of weeks it was extended yesterday afternoon. was expected to expire and scheduled to expire september 13th now they're saying you have to have a face mask on that will go through january 18th passenger levels, for the month
of august are down 22%, compared to the same time in 2019 that's in line with what we saw in july, down 21% in the month of july. so, why are they plateauing at this level right now we've heard this fruom southwest speert and you've got the delta variant spreading, so people are thinking twice before looking ats a trip or booking a trip we're not likely to see a whole lot of movement in terms of passenger movement this fall basically midseptember through midnovember tends to be basically business travel. historically, that's when you see the biggest growth and we're not seeing that right now. don't be surprise fd you see airline index and stocks not doing a whole lot, at least until we get a catalyst over the
next few months. bottom line is this. this level we're at, we're likely going to see that for the next couple of mungs >> and of course the other piece of the puzzle is labor we know that company, like spirit, has been plague bide not having enough pilots and crews so, how is that playing out in real time too as the companies try to recruit and as many companies across many industries are going to grapple with what a third booster means and whether that too gets mandated. >> the only airlines that have said they're mandating vaccinations american, delta, hawaiian. the others have not decided to put in vaccine mandates. it spitz and starts.
they have enough for a while but if there's a major storm or something puts crews out of place, that's where you have the problems and that's what we saw from spirit. >> what a week for carriers. >> kpagt aech wood on tech check tomorrow so much to ask about you can go anywhere with cathy in the meantime, we'll look fatorward to that stay with us the world's first fully autonomous vehicle is almost at the finish line what a ride! i invested in invesco qqq a fund that invests in the innovators of the nasdaq-100 like you become an agent of innovation with invesco qqq what happens when we welcome change? we can make emergency medicine possible at 40,000 feet. instead of burning our past for power,
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tractor supply and dollar tree among the biggest winners today. best buy and dollar tree report quarterly results nengs week and then tesla looking to snap a three-day losing streak. that stock with the arc innovation ticker gets more investor attention so as tesla goes a lot of folks look to the arc innovation etf carl, very much an interesting trade with tesla and arc innovation etf back to you. >> thank you as we go to a quick break t-mobile confirming it is hacked the personal information of 7.8 million customers all compromised in that breach plus watching cannabis today in the green
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hi, frank. >> hey there shares trading higher. after they reached a deal to have the option for a 21% stake with just about 120 million in annual sales this move is designed to position tilray for u.s. legalization if and when that happens and follows moves with apples and oranges and with the same objective, a supply khan for production and distribution in the u.s they can't sell the product here the canadian market is really just a fraction of the u.s. market canadian operators bramnched ou but the u.s. market is the holy grail. california bigger than the rest of the global market combined. so right now the u.s. market dominated by the use of cannabis flower 11%.
but tilray ceo simon and others made it clear cannabis consumer packaged goods are where they see the growth opportunities. >> i like companies that have great brands and you think about it here. today has 25 retail stores ultimately upon legalization the opportunities of store within a store. one day i hope you see a menmen in a target and a walmart. >> so right now keep an eye on the msos pure canadian cannabis etf today. it spiked earlier this year. it's fallen sharply but up almost 2% following a 2% drop yesterday. morgan, back over to you. >> quickly, frank, we have seen legislation kicking the way through congress to decriminalize cannabis and the fact of another one of the deals struck is that a sign that we
are closer than the beginning of the year anticipating this a federal change in law? >> obviously tilray hopes so but i think the other thought is positioning if and when it happens. but it's thought to be eventual. >> all right frank holland, thank you that will do it for "squawk on the street." "tech check" starts now. ♪ good wednesday morning welcome. i'm carl reasons to worry we have warnings on some of the most popular names in tech and then why the bulls won with robinhood coming out after the