Transcripts For CNBC Squawk 20240703

Boost from its Growth Strategy this is elon musk on last nights call weve updated the vehicle lineup we expect it to be more like the early 2025 if not late this year these new vehicles, including more affordable models, will use aspects of the next generation platform as well as aspects of our current platforms and will able to produce on the same manufacturing lines as our current vehicle lineup its not contingent upon any new factory or massive new production line. Bespoke says it looks like this will be the best earnings reaction since 2020. You do have some upgrades you have a very nice bank of america upgrade, and you have people saying its a clearing event. Did he pull a rabbit out of a hat . He came out back with a small car, as well as with the terrific app, by the way, in the deck that is the hailing app . I thought that the key analogy, david, was not the airbnb analogy. He did that. That was great it was the elevator. Elevator. Yeah was that not terrific youre not alone in that, jim. It came up in a couple conversations i had this morning, and someone went for complexity and tried to figure out how many elevators there are in the world im not sure the number, because it sounded way low i tell people, it was such a great analogy, about how it started with the unions. You used to have somebody who operated the elevator. Do we ever think about anybody getting in an elevator any longer and somebody pulling the lever . Of course not. He comes up with a compelling reason why you should buy the stock. Things like that he does i was listening to the call last night, couple of other people in my house who were overhearing it, and i remarked on how hes believable he is sort of uniquely totally and yet, somebody else piped up, yeah, but should you believe him . Should you believe him . Doug kasz today, extend and pretend. Bernstein keeps 120, jim, says that growing units this year in tonys view, not a slam dunk no, but you have adam jonas talking about an accelerated launch of more affordable models dan ives likes the lowercost vehicle, but he did lower the price target goldman talking about better than the low expectations. I mean, i think that the baird piece, which says, sees turning point on bearish sentiment, this is now trading on sentiment, and the sentiment was so low that jonas stuff was terrific. The sentiment was so low, it was almost like if you came in and said, well do small car, and at the same time, well do a rideshare app. Well, look, you think its only going to be up 15 . I think this thing has a possibility of being up 30, because the sentiment changed. Now, david, the Free Cash Flow didnt change. It was bad no, and they consumed an enormous amount of capital during the quarter as an auto maker will, given how capitalintensive the business is so, carl, you have this situation where individuals love this stock i mean, when we talk about whats stock people want us to talk about they want us to talk about tesla. Theyve been waiting for this, but what are they waiting for . The app is cool. You summon it. I summoned on uber last night, and there was a person in it driving it i like that. If not, i may not have liked that given the fact that i was in San Francisco during a time where you didnt want driverless he did saying version 12 was profound. We have uber and lyft moving on this lyft is down a percent i think were in one of these in interregnum periods. Everything that was bad is now good its frontsy backsy. Remember the movie, bananas . Everybody must wear underwear, and to ensure it, you have to wear it on the outside people probably dont know who woody allen is he has a movie in theaters, like, right now. Thats the bad woody allen. Havent been a lot of good ones lately. Its almost comical how much Everybody Loves a Free Cash Flow story thats horrendous. If im not mistaken, sleeper, there were autonomous automobiles there were all kinds of gadgets. The autonomous automobile in sleeper for whats his name had to use the nuclear bomb, was the head of the Teachers Union i forget his name. More expansible than what he offered us last night. The told people, flatout, his Investor Base, if you want to invest in a car company, we werent interested you should be interested in autonomy and robotics, because that is what we are, and obvi obviously with almost a half a billion market cap name me another company with incredibly negative Free Cash Flow thats going higher i cant to your point about sentiment. Boeing. Oh. Boeing is actually higher ahead of the bell after this narrower loss and lower cash burn than expected for q1. Our phil lebeau is at the Production Facility in renton and has a very special guest hey, phil. Hey, carl dave calhoun, thank you for joining us this morning. You heard the setup there yep q1, big loss. Yep less than the street was expecting, but you still burned through 3. 9 billion in cash yeah. Is this the bottom in terms of Free Cash Flow and how much youre going to be losing per quarter . Yeah, rather than address the bottom, this first half will be the result of a lot of dramatic action that weve taken in this factory to slow things down. Synchronize all of our work with the supply chain, eliminate all large portions of traveled work, work that we did in our factory to take a nonconforming part from a supplier and turning it into a conforming part weve made some dramatic changes. We had standdowns. So, the cost in the first half will be real, but then well get back in normal order as we get into the second half how much different is the process behind you right now than it was 60 days ago, specifically in terms of the fuselages that youre taking from wichita, from Spirit Aerosystems . Its dramatic its dramatic. We took all of the inspection processes and the people doing those inspections, and then the people who were doing the rework embedded in these positions in the factory, and we moved it to wichita. I give pat shanahan a lot of credit for saying, bring them down lets do it. So, they are now embedded there, and from that day forward, which was really march 1st, we will only accept they will only ship a conforming fuselage, which means it comes in this door in nearperfect shape, and then it moves through this factory at a much reduced cycle. More than a few on wall street have said, look, you still have the target out there of 10 billion annual Free Cash Flow by the end of 2026. Get rid of it. I have not come across one analyst who has said its a smart thing to keep it out there. Why you didnt reiterate this morning, but youre not taking it down. Why keep it . Because i believe it. I just do. This will cost us six months that means in that twoyear window, it will be six months later than whenever it was going to happen. I still believe it will happen in that twoyear window. And by the way, this was never a heroic target. This was a target that we believed we could meet when this factory moved and 37s move and deliveries are done, so im still strongly believe in it, and i believe that the work were doing to eliminate travel work in these factories, to resynchronize with our supply chain, make it more probable, not less jim, i know you have a question for dave. I wanted to know obviously, steve from qualcomm, working 24 7 to try to find a successor. How about Stephanie Pope shes there. Shes terrific maybe its someone internal that you need because the problems are so complex you know, jim, i happen to be a pretty strong believer in stephanies potential to run the company. Weve invested a lot in stephanie. You saw what she did with our Services Business for the last couple years were at record margins, meeting our customers demands, and she came in here and put both feet on the ground, and shes been out on that floor. Its a little bit of trial by fire on that front, which i am confident that she will work her way through and perform. And then, yeah, steve still has a tough job. Steve will canvas the industry steve will canvas the Ceo Community and get to know our company. Hes already invested a lot of time and energy in getting to know our lead technical people hes developing a real perspective, and he has time to do it. He has time to do it so, im quite optimistic about these outcomes, and i am quite optimistic about the performance that Stephanie Pope will bring dave, next week marks the 60day mark, if you will, for reporting back to the faa, saying, heres where we were in terms of fixing the problems that exist here on the 737 max line and then, 90 days at the end of may. By the end of may, you expect the faa to say, look, we are signing off on the changes that have been put in place here . Yeah, so, first of all, the review is going well in the sense that were both approaching it, businesslike we all want the same thing we want a factory under control. We want a set of metrics that demonstrates its under control, month to month to month to month, and then we want compliance on the floor. Are your tools in the right place . Are the instructions set up the way theyre supposed to be we want that to be as perfect as it can be. Easily measurable. And i think at the end of 90 days, they will simply say, we agree with this control plan we will measure it, and you will have to demonstrate performance every step of the way. Youve seen the metrics already. You know some of these numbers percentagewise, how many fewer problems are you seeing this week than you saw two months ago . Well, if i pick that one part that we talked about, the fuselage, the incoming, reduce ow nonconformance load about 80 . Youve got 80 fewer nonconformance problems with the fuselages coming in from watch to than two months ago yes so, as you look at this, is this the low in terms of max production so many analysts say, these guys its more about whether its low or not it is wildly sporadic, because again, were trying to cysync u our supply chain this will begin to steady as we get through the Second Quarter, and then it will be about, how many perfect fuselages do we get . Im confident well get there. You saw the whistleblower hearings last week in d. C. Not sure if you watched them or not, but you saw what was going on you know the commentary thats coming out of capitol hill how often are you in touch with senators, separate from, you know, any discussions about a hearing and testifying how often are you talking with them youll probably remember, i think, the second week after the alaska accident, i went and visited with a whole bunch ive been in regular contact, every week, we tee up one or two conversations so i can bring them up to date on everything were discussing the ntsb investigation, the faa work, our determination to see the spirit work through, our willingness to slow down the factory to get things under control andsynchronize with that supply chain. I walk them through all of that. Theyre very appreciative of the conversation i dont want anybody surprised, and yeah im doing my very best to, one, always be responsible, and two, always be transparent. Real quick. Spirit aerosystems, do we see an acquisition likely in the Second Quarter . Announced . Yeah, so, let me first say, its not being delayed nothings off the rails. We are working diligently to get it done, and im determined to get that done. Spirit, in working with its other customers, are taking actions to ensure that all of those relationships are what they need to be, and everything they do in that regard is better for us so, were going to be patient, let them get their job done with their respective customers, and then well get a deal done and i yeah. I believe in q2. Its more than likely. Dave calhoun, ceo of boeing, guys well send it back to you. Wow extraordinary. I think some people would say the cash flow here is so weak that maybe this is the same thing that we saw during the great recession, trying to put together the, you know, a bond. I mean, during the the Steve Mnuchin bond deal. It was 26 bill, i think it turned the markets when they were able to raise that. People are kind of sanguine well, i mean, phil pushed dave calhoun, particularly on the target for, what was it, 25 the 10 billion target he said, i believe it. I know. Why does he have the credibility . Im just asking. I happen to think that he does you do . You do well, look, i think that in the end, you have two companies. Airbus is having trouble meeting demand theyve got eight years worth of demand at boeing. They need the planes, the customers. The customers arent saying, you know what, were going to go to theres nowhere else to go. Its a duopoly defense. How can you not, because theres growing demand and we need new aircraft. United the other day, weve already hired the pilots listen to larry culp. From ge aerospace. This is a highquality problem that they have to get the cash flow, but how Many Industries have a situation where the demand is so much greater that we have to overlook problems like this . We have to overlook them well, there are some problems that you cant overlook when it comes to boeing. Well like making sure theyre putting everything together the way its supposed to be. Well, thats a safety issue which remains his memo was all about safety greg hayes, b of a, he said, jim, you know whats really important here safety and im, like, okay. Sounds good. Yeah no kidding safety first. Safety first . Safety first. Really . Yeah. Davids very concerned. Im very safety first when we come back, a bunch of earnings to get to, including at t, visa, hilton, hasbro mattel, otis, humana take a look at the market. Take a look at the market. Ngoway. Go deeper with thinkorswim our awardwining trading platforms. Unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. And sharpen your skills with an immersive Online Education crafted just for traders. All so you can trade brilliantly. So this is pickleball . Its basically tennis for babies, but for adults. It should be called wiffle tennis. Pickle yeah, aw whoo these guys are intense. We got nothing to worry about. With e trade from morgan stanley, were ready for whatever gets served up. Dude, you gotta work on your trash talk. Id rather work on saving for retirement. Or college, since you like to get schooled. Thats a pretty good burn, right . Got him. Good game. Thanks for coming to our clinic, first ones free. I dont want you to move. Thanks for coming to our clinic, im gonna miss you so much. You realize well have internet waiting for us at the new place, right . Oh, we know. We just like making a scene. Transferring your services has never been easier. Get connected on the day of your move with the xfinity app. Can i sleep over at your new place . Can katie sleep over tonight . Sure, honey this generation is so dramatic move with xfinity. Lets talk a little at t the stock does appear it will open higher, although it already in the premarket has been higher than that. Calls, still ongoing, i believe. Started at 8 30. Im reading a running transcript of it. I mean, the results were pretty good you know, i did talk to the cfo earlier this morning you did yeah, i did 170 basis points in Margin Expansion. They had the most postpaid net ads, and their fiber business continues to grow very quickly theyve got 8. 6 million subscribers in fiber i saw that. Making them one of the bigger players there, and obviously, they have more opportunity, they say. This has been a key strategic area for them. Wireless services up roughly 3 , and theyre guiding Free Cash Flow between 17 and 18 billion. I did ask him, whats the Margin Expansion about here where is that coming from . He obviously mentioned theyve already cut 6 billion in or have 6 billion in run rate savings already that have come out over the last few years or has been added depending on how you want to cost cut, hence the savings. Talking about a. I. , helping them in terms of their how theyre dealing with customers and the Voice Recognition systems that make things easier and more productive theyve reduced their retail footprint a bit. Fiber, easier to maintain than is copper and on from there. But you know, jim, i know you have rarely been constructive on at ts stock i would point out, by the way, stankey, throwing a little shade at verizon, which pointed at numbers that were initially well received and then reversed take a listen when he talked about lowcalorie. Pay particular attention we now have about 71. 6 million highvalue, postpaid phone subscribers, which is up 1. 5 million from a year ago, and these arent empty calorie additions. Our results reflect the quality of our Customer Growth with higher arpu, higher adjusted operating income, improved margins, and lower postpaid churn. So, sort of trying to draw a distinction there between what i guess they believe were lowercalorie additions at verizon. This gets you to apple a little bit as well. Consumers are holding on to their devices longer yes the upgrade cycle is taking longer since 5g, there hasnt been something that has made you go out and say, i got to get a new iphone he was talking about that. Like everybody, hes waiting as well for, what are they going to put out in the fall thats going to have an a. I. Component to it that might get things moving again . Is that the 0. 72 churn, which is incredibly low . Yeah, it is keeps things low, and by the way, they subsidize devices that actually helps on the margin side as well the revenue side may not be as high it helps with margins, because theyre not initially making the money on the devices i give them that. Now, david, some of this att fiber business, youre talking about penetration of 40 , 27. 1 million total locations im trying to read this. So, they have the opportunity. 27. 1 million locations that they can market to, and theyre you know, they had a significant addition in subscribers to their fiber. How about att, not as bad as used to be is that the headline att, not as bad as we used to be ill give you the last word on that one. Its good its a good headline still an important company, obviously. The consumer, again, according to the cfo, remains pretty resilient. Okay. All right yeah, its a good report, david. Thank you speaking of apple, well get to some supply chain reports about the vision pro, at least well get cramers mad dash and the opening bell dont awhe. Gonyer in any business, you ride the line between numbers and people. Whats right for the business and whats best for everyone who depends on it. Solving todays challenges while creating future opportunities. It takes balance. Cla cpas, consultants, and wealth advisors. Well get you there. aaron i own a lot of businesses. Cla cpas, consultants, and wealth advisors. So i wear a lot of hats. My restaurants, my tattoo shop. And i also have a nonprofit. But no matter what business im in. My network and my tech need to keep up. Thank you verizon business. kevin now our businesses get fast and reliable internet from the same network that powers our phones. waitress all with the security features we need. aaron because my businesses are my life. Man, the fish tacos are blowing up so whatevers next. Were cooking with fire. Lets make it happen vo switch to the partner businesses rely on. Look for some activity in the chips today, as youll see Texas Instruments going to up close to 7 with a double beat and guide in line. Well gethopint e eng bell in just four minutes. Morikawa on 18. He is really boxed in here. Not a good spot. Off the comcast business van. Into the vending area. Oh, not the fries wheres the ball . Anybody see it . Oh wait, there it is back into play and. Aw no, its in the water. Wait a minute. Alligator. Are you kidding me . You got to be kidding me. Rolling towards the cup, and its in the hole what an impossible shot brought to you by comcast business. Announcer the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. Lets get to a mad dash and opening bell you want to talk a little vertiv our friend dave coaty is chairman, and that stock has been on a run its a spac it was originally a spac, yes, way back. They have 60 organic order growth, why . Theyre in the datacenter. And the datacenter, as we saw in the wall street journal, is still hot as ever. I give you vertiv as being a datacenter play that works look at that to start look at that thing look what its up. 600 in a year it was catchable. You could have had it. I know. I know lets get the opening bell and the cnbc realtime exchange at the big board, it is the uconn huskies Mens Basketball Team in honor of winning backtoback Championships First Team to do that since 07 on the mens side. At the nasdaq, its copart, an online car auction company, celebrating 30 years on the nasdaq uconn, uconn, uconn backtoback, david amazing amazing. Dynasty. Right yeah. Very impressive. We open up, jim, within about 15 points of 5,100 does this say tactical bounce or can this continue if pce goes our way . I think it depends on the bond actions yesterday, the twoyear was regarded as being one of the great auctions ever. Today, we get a 5 , not as attractive were looking at money that came out of nowhere going into financials and going into bonds, and now its broadening back out to the magnificent ones, which are recording, and its kind of got an era of good feeling, but i dont think this can necessarily last we have to have so many things go right now, we had tesla go right we had boeing go right i think meta can go right. I dont know if google can go right, because its up so much amazon, i like microsoft, maybe, is up too much so and nvidias not right now. But look at meta thats its soaring, and yet, if tiktok is really banned, so to speak, then the world is zuckerbergs oyster. Yeah, i mean, its worth mentioning, of course, that bill is going to go to the president s desk today of course, its an aid bill for ukraine and israel, humanitarian aid as well is a part of it. But the ban on tiktok is going to get signed into law theyre going to have a year, as we pointed out many times, it seems unlikely that the Chinese Government is going to let tiktoks owner, bytedance, sell the u. S. Or the englishlanguage version of the app, but it remains to be seen, and carl, it very well may end up being decided in the courts. Meantime, blinkens in shanghai today, possible facetoface meeting with xi on friday about support for the russians, about some of this, about sanctions, about chips it is really theres nothing that they have in common right now. Were trying to stop them everywhere, and yet were still talking to them. And i dont get that i think its great that they talk but a what theyre really doing is trying to stop cybersecurity at home. Theyre trying to keep them from having all the advanced chips. And yet, they want to the chinese are willing to talk to them i still think that the chinese have a weaker hand, and thats why theyre willing to talk, but were not giving them anything its really different from the old days when we wanted to sell diapers and prell so badly that we gave them the house we dont do that anymore we say, listen, were going to take away you want nvidia well give you Texas Instruments, which, by the way, is up big. And theyre not going to use amd or intel in their own telecommunications infrastructure, for example, any longer how about apple i mean, apple, nike, what do w give them . Apple, nike, estee lauder. Starbucks starbucks and those are all doing badly. Yeah, what else are we forgetting something . Tesla. We give them tesla too teslas different teslas fabulous the only company thats been able to 100 own its chinese subsidiary right of course, that was very helpful to the chinese ev makers, it would seem. Absolutely. The advances theyve made tesla made shanghai its home for making some of its automobiles what do you make of the idea that were talking to them and yet have nothing to say . What are those talks like . We dont like you, you dont like us, okay, lets have some food theres so much i dont understand that i can rarely share anything that would be of value, jim david, you never say that what you say is, its to be continued. Jurys still out. Well see time will tell. Absolutely. You guys david, i want an abundance of caution on this. Can we talk lets talk a little visa, because its only a 565 billion market cap. Let me get my visa file out get your visa file out. Gap net income equated to 2. 29 a share. Second fiscal quarter results. Nongap, 5. 1 billion take your pick as a reflection of the overall economy as well, jim, despite what may be some brown shoots that both you and i have a sort of been hearing about anecdotally. Cross border volume, up 14 . Process transactions up 11 . That doesnt sound like much of a slowdown, although there was a deceleration during the quarter in that growth right they gave you an april number. That was okay. Look, nothings changed in terms of the consumer wanting to go places the consumer is still the long on money, short on time. We saw that from american express. They want to do things they just seem to be less materially oriented. They want to travel, plays into boeings hands im not kidding. When you speak to larry culp of ge aerospace, he says, people want to travel like never before that has not changed and when it comes to goods, whether they be luxury or otherwise, youre right. I mean, kerring is another example, owner of gucci. Not a good quarter the stock is down. You can take a look. That was a bad quarter. Were talking about a significant decline in the first half operating income as a result of gucci sales, and by the way, its not alone. Weve seen it with any number of other Luxury Companies right i mean, i think that the worlds changed. Usual Group Richemont is okay because you wear it on your arm. You cant see it its not showy but i have to tell you that the idea that were going to go spend on great stuff, its just not the new way. Its a new frugality, except for when it comes to travel, because its an experiential economy i had mattel on last night hasbro is the number one s per right now i thought i had it wrong 61 cents beats 27. It was an amazing quarter that guy is so good. We should get him on i thought that mattel was going to be the star of the toy show no it was hasbro. But mattel has this 12ride theme park in glendale, so its kind of doing a reverse disney people like that what happened at hasbro well, christopher that guy, cox, hes amazing i mean, honestly he did this wizards wizards is better. Dave, its also an inventory story. The inventory has finally dropped. Chris cox has finally turned around hasbro. The toy business has gotten better you know, my father sold toys. What a horrible business it is tough yeah. Its really tough. He sold bobby shants games, a reliever for the phillies for about a half a season, and that was what he did for a living does this mean you got free stuff as a kid you could have all the bobby sh shants toys you wanted he sold them out of a Station Wagon at a flea market, and sometimes when you live in that fantasy world, its nice i felt very at home back there with the Station Wagon im bringing this up because toys are so hard, and yet hasbro and mattel were good last night. I think thats extraordinary take a listen to what mattel told jim on mad. We are executing on our 1 billion Share Repurchase program, we expect to outpace the industry and gain share and reaffirm guidance for the year, and the plan for the year is to emphasize profitability, gross Margin Expansion, and strong cash generation and return to topline growth in 2025 whether its toys, jim, you mentioned travel hiltons up six. Hilton is you know, thats a net unit growth, the n. U. G. That people like so much we got this upgrade of airbnb and mizuho the airbnb. You know, you have both you have musk talking airbnb, and then youve got good airbnb. And by the way, the olympics they mentioned the olympics on could be a boost to rates. They go from 150 to 200. I happen to love chesky i think hes great i remember when things were going really bad during covid, and he had to bite the bullet, and he hated letting people off, and he saved the company look at this thing its a juggernaut. Texas instruments shares are also up 6 look, they said they they had the worst Conference Call in the world, but they said, look, we saw a bottom in some of the analog stuff, which is autos, and then people buy on semi, which is the worstperforming semi Texas Instruments gets away away it, even though they gave you absolutely just give you inventory. Yeah, yeah. I love how they insult the analysts maybe they need a little c comeuppance there. It was along with a couple of other companies, chip making in the world. Its where morris chang spent most of his career before going to create taiwan semi. Weve not mentioned nvidia, which is an insult to nvidia, because nvidia is the one that started going remember, nvidia was down 10 on friday. Super micro was down 23 those are the ones that have to come back, not Texas Instruments, okay . This is going to be this is why, carl, when you asked me, are we out of the woods, whatever, nvidia, if it opportunity take out the i believe in owning nvidia if apple cant lift, then i think youve got these two stocks that are just glaring and right in your face as being bellwethers. If one of the microsoft, meta, google doesnt hit it, then you tip. And you think you think alphabets the prime suspect on that i just think alphabet is weve been we have a club meeting today at 12 00, and im talking about how im grateful we sold some alphabet, because i dont trust alphabet you need waymo, split off. You need a cfo, which im not sure were going to get. You need a dividend, which im not sure were going to get. And you need a breakdown of youtube, and im not sure were going to get that. Thats like four things you got to get instead, i think you get, hey, its good here and we run cat videos in the Fourth Quarter of nfl, because wi we dont care. Why dont they sell ads . I think they do sell plenty of ads what are you talking about in the Fourth Quarter of the nfl oh, the nfl, specifically meanwhile, we have everything on the line for daily fantasy, and theyre running cats how much do you make when youre running cat videos apparently david, its get this purrfect. Back to nvidia i worked all show on that that was good back to nvidia and tesla they bought 35,000, already, equivalent h100s, targeting 85,000 by yearend a billion of quarterly spend on compute alone for tesla, and thats all nvidia revenue, right . Pretty much. Yes remember when he dissed jensen yeah. And then he came back to jensen i mean, come on. Lets have some cronying h100s arent even what i want i want Blackwell Blackwell is not available yet. September but amazons going to get a lot of blackwell, and believe me when i say zuckerberg is a bigger orderer zuckerberg its so fast, and so if he gets tiktok, and hes got all he has 300,000 the biggest buyer, other than amazon, of what jensen offers, the worlds, like i said, the worlds his. Remember when congress hated him . Theyre also running llama. Llama 3 open source a lot of people are worried about that that open source we hated it when he was closed source. I know, but a lot of bad actors, and what are they going to do . Back to the a. I. Conversation. You know what yesterday, i sent someone a chip, a video, and it wasnt apple, and it didnt go through. Justice department the green bubble phenomenon made me feel much better about jonathan kanter. So much for that vision pro thats because they havent made it a businesstobusiness play with jensen huang theyre still keeping it as a Consumer Product hes talking about the dramatic cut. Yeah. Longtime supply watcher on apple says they have cut their vision pro forecast for the year look, like i said, the long knives are out for apple you made the point a few times. Its very expensive to buy we need to see its businesstobusiness no, siemens could buy a hundred thousand of these. Jensen said, look, its a businesstobusiness product and apple doesnt necessarily, to my point, do businesstobusiness they like consumer but jensen says if this was a businesstobusiness, then this product would be amazing you would buy cars, carvana. You would buy homes. And thats what its for but he doesnt think tim cook knows that remember, i got in a car that didnt exist i can got in a car that was a chair. I stepped out of the chair like it was a car i almost slammed the door on my fingers. Would it have hurt . No, because there was no car. Oh. Are you able to step off the cliff when they test you its difficult, right . Yes, i have to tell you, i looked under the hood. I kicked the tires and there were no tires. There was no hood. Its amazing but no theyre using it just for, like, movies on a plane. Its not enough. Its a lot of money to spend to just watch movies on a plane. Hes so good. Your insight today is extraordinary. As i like to say often, i have that keen sense for the obvious. Yes, you do it has stood me well. Captain obvious right here. Jim, the other report tonight will be ibm. You got this journal hachicorp story going. I think ibm is going to have an upside surprise because this management knows how to do that, hallelujah and hachicorp, i dont know. Salesforce wants to buy informatic and everybody hates it they dont want to anymore. It smelled a little like paypal wanting to buy pinterest. That one went away. Yeah. Dont saddle that on salesforce anymore no, i think salesforce is going to grow. Earnings per share, like, 21 11 on the rev . Right . Jim, we havent really gotten to the banks interesting report out of mike mayo at wells, sort of judging various ceos for their tenyear performance on the day where were getting some annual meetings then, you had dimon at the Economic Club of new york yesterday talking about the u. S. Economy. Take a listen. Soft landing type of scenario, but im put me on the cautious side of that one. Lets talk about great quote when i started working on wall street, i cant say it in its actual language, but it was something like, the markets will do whatever they have to do to hurt the most people and this may be one of those setups. Well, number one, you know why would have picked number one if i worked at wells i would have picked Charlie Scharf the turnaround there is big. It would also be my boss what do you think . I think that would have been a good choice. Right how about the bank of america bond portfolio hows that done for brian . Not as well right how about citi the illusion the illusion of goodness you think its an illusion. Youre not a believer in mike mayo, who came on this morning did he bring a prop he brought a prop he had a director thing. 13th reorganization, but this is going to be the one. Yes if you want stocks the best performer. But you know, theres a bit of alchemy there, i think. Intangible book value is still so different i cant figure it out. David. Jim how about that vertiv . You know what they bought back listen to me vertiv bought back do you see how many shares they bought back a helot. Everybody loves vertiv they bought back six million shares they bought back 9. 1 million shares at 66, vertiv. So, i see you citi, and i raise you vertiv what do you think . I like it yeah. Dave coaty, man dave coaty. I was there when he happened to be making some changes with management and it was kind of like what jamie dimon said about how you cant say. I happened to be there it was a different kind of moment wow, really jamie didnt talk about, i love capitalism. Hes another one who doesnt suffer fools, either dimon or coaty. They dont suffer fools. No, no. When i was when dave lived next door to me, i shoveled his walk i didnt know it was his he said, you shoveled my walk . Thats a good way to get on the right foot thats how i got on the right side of dave coaty i shoveled his walk. How do you like that im amazed. See, david . With an abundance of caution, he says hes amazed quick reminder dont miss the next investing club monthly meeting, as jim says, happening at noon today, eastern time im so ready. You can join the club for members only access to jims next big portfolio moves as we go to break. Watch bonds as jim also says well keep an eye on the fiveyear at 1 00 p. M. Eastern time durables came in, best since november this morning. And right now, the nasdaq, trying to put together its best week since november. Dont go away. The future is not just going to happen. You have to make it. And if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. The all new godaddy airo. Put your Business Online in minutes with the power of ai. Watch buy jim today, up 5. 5 here today they reiterate the full year guide. A bit of a mixed open, dow down 15, s p up 16. Get to stop trading with jim next why not . Did you forget something . My protein shake. The future isnt scary, not investing in it is. Youre so dramatic amelia. Bye jen. 100 innovative companies, one etf. Before investing, carefully read and consider Fund Investment objectives, risks, charges expenses and more prospectus at invesco. Com. If youve ever grilled, you know you can count on propane to make everything great. But did you know propane also Powers School buses that produce lower emissions that lead to higher test scores . Or that propane can cut your energy costs at home . It powers big jobs and small ones too. From hospitals to hospitality, people rely on propanean Energy Source thats affordable, plentiful, and environmentally friendly for everyone. Get the facts at propane. Com now. Youre probably not easily persuaded to switch and environmentally f mobile providers for your business. But what if we told you its possible that comcast business mobile can save you up to 75 a year on your wireless bill versus the big three carriers . You can get two unlimited lines for just 30 each a month. All on the most reliable 5g mobile network nationwide. Wireless that works for you. For a limited time, ask how to save up to 830 off an eligible 5g phone when you switch to comcast business mobile. Dont wait call, click or visit an xfinity store today. Lets get to jim and stop trading. Every time we do our club meeting at 12 00 we have more questions than answers people love the questions, so well take the ones we dont get to and answer them on the show i urge people to come in, i go over a lot of stocks and it is kind of revelatory im not always complimentary of positions we own people should listen. Cant wait. Good information tonight . Thats what were going to do i find the club compelling i dont want to let people down. We get like 100 questions i dont want to let people down. See you at 6 00 and noon eastern time. Yeah. More rctn pt eaiotoos teslas earnings surge well talk to toni sacconichi in a moment good wednesday morning, welcome to another hour of squawk on the street im Carl Quintanilla with david faber and leslie picker, sara eisen has the morning off. A muted open, s p up nine points but nasdaq up. 6 putting together the best week since november chips best days in about a month. And, of course, a lot of blue chips earnings to get to including at t and tesla. Were 30 minutes into the trading session. Three movers were watching including Texas Instruments rallying on the Second Quarter revenue forecast signaling a return for chip demand the etf that tracks the semis. The stock on pace for its best day since early march. Thats up 2. 6 right now hasbro another gainer this morning, posting a smaller than expected drop in sales the stock turns positive yeartodate, up 12 and hilton beating earnings estimates raising the forecast for the year, betting demand for International Travel will offset normalizing trends in the u. S. Those shares up more than 5. 5 right now. Shares of tesla on pace for their best day since january of 2022 the ev maker missed expectations but theyre getting a boost from the commentary on the Conference Call about the plan for low coast evs. Listen. We updated our future vehicle to accelerate the launch of new models in the second half of 2025 so we expect it to be more like the early 2025 if not late this year. These new vehicles, including more affordable models use aspects of the next generation platforms and our current platforms and will be on the same lines as our current lineup its not contingent on any new factory or massive production line. B of a does upgrade but a number of others cutting their targets. Joining us this morning is Toni Sacconaghi always good to check in with you, thanks for the time this morning. Good morning, carl. You stick with the underperform what didnt you hear that you thought youd like to hear look, i think on the Positive Side bulls can say there will be some new models coming out, hopefully over the course of the next year. I think the concern going into the Earnings Call was that tesla was all in on robo taxi and selfdriving and that was many years away and was going to abandon a low cost car or new models what we heard on the call last night was that there would be some new models and theyll come relatively soon, within the next year i think my skepticism is really around what might those new models be . It takes a long time to roll out a new modelling with even getting safety approval in the United States can take a year or more for a new model and clearly designing a new model has taken tesla typically two to four years. So the question is, will these really be new models or tweaks on existing models and if theyre tweaks on existing models can they really be there for teslas growth which is the key issue the other pillars are robo taxi, cost saving at a billion annualized what do you make of those ideas . I think fsd is both and robo taxi are a technical and regulatory question. I think technically theres still a ways to go on fsd. Tesla has come a remarkable way but its really tough. Ive been driving and using the trial for the last three weeks there are definitely, you know, limitations. You know, everyday limitations where i had to be very alert much of the time great progress but still a long ways to go i think more importantly is just the regulatory challenge waymo started doing selfdriving trials in nevada in 2012 it took ten years to get permission to do a robo taxi in the state of nevada and that has to be replicated in every state. So you have the challenge that will be years in fsd and the testing and regulatory case. I think we will have a selfdriving future, the world will benefit from that, i just think it takes five to ten years. Its not clear to me that tesla will be the only company who solves this problem. There may be others what happens in those next five to ten years then for this company . He doesnt seem to want to talk about being a car company often even though he may have thrown a bone to some people who want more cars. Yeah, david, look lets just, as a hypothesis say tesla gets to full selfdriving in five years from now certainly that would be valuecreating because people would pay for that it could enable regulators permitting to be a robo taxi but my belief or fear is that almost every innovation in the automotive marketplace in the last 50 years has been priced away because of global competition and benefitted consumers. Think of anything from air bags that first came out at 1,000 a pop that are now standard, ten air bags on every car. You can think about backup cameras, blind spot detecters, even selfparking now. All these things were premium features that, you know, first movers were able to command a Price Premium for. And now none of those theyre all included as table stakes in the price of a car so i think thats the long term concern ultimately the competitive nature of the industry makes it very difficult for anyone who create something that is sustainably different and charge for it. Maybe theres a period tesla has full selfdriving and no one else does and tesla can extract a high rent. But thats a difficult assumption to make for a long period of time given competitors like waymo who are in the selfdriving space the strategy will rely on million if not tens of millions of teslas out there. That takes me back to the current marketplace, toni. Where do you stand in terms of overall demand and growth for evs right now . As we said countless times it seems as though theres a slowing and perhaps a reluctance among those who dont have them right now to make that move . We have had some slowing. I think evs globally grew about 35 last year, grew about 25 in the First Quarter globally this year, a different performance in different regions. Weve had some slow down, as people as, you know, sort of the mass market is the next leg to adopt but i do believe over the next ten years well have significant ev adoption. I think price point has come down over time, charging becomes more happens more quickly and range becomes longer and so, the key impediments, price, range anxiety, charge time, go away i think over the next five to ten years we will be an ev world ten years from now, predominantly ev but, you know, in the near term, those constraints exist. And those are deterring some incremental buyers and were likely going to have more muted growth for the next couple of years. Still growing 25 right now, thats not a bad growth right now. Do you expect in the near term to see more earnings revisions in the downward, or do you think what you see right now is pricing in all the tricky dynamics im a little worried that consensus is too optimistic about next year. They have earnings improving substantially over this year and at least at this point we dont really know. We dont know what new models tesla will bring but i think they will be less expensive and less expensive models typically have lower margins its unclear how cannibalistic theyll be to existing offerings. So this notion that tesla is now off to the races and next year will be a better year, its still a question mark in my mind so im currently below consensus estimates for next year. We still dont know a lot quite frankly around the timing, price points of any new models that tesla might bring out next year. I hope youll entertain a question on apple and the forecast of vision pro getting trimmed. Im sure youll say its not a needle mover as a new category but is it material gaming it out further . I dont think it is you know, this is a 3,500 Consumer Product theres really been no historical precedent for mass adoption of any product at that kind of price point. This is a product for developers principally to see awareness in the marketplace for consumers. And over time in the next three to five years i expect apple to innovate on this product and lower its price point to improve the power consumption so you dont need to carry around a power pack on your backside. And for the product to have a much larger Addressable Market but this is more, i would say, almost proof of concept, the developer product was never really anything in investors expectations from a financial contribution perspective. Toni, appreciate the help on two important names today. Always good to check in with you. Thanks. Thank you we have more than tesla today when it comes to earnings and cnbc is all over it. Phil lebeau is coming off a big interview with boeings ceo. Kate rooney is in San Francisco joining us to talk visa. And Bertha Coombs is tracking biotech giants phil, starting with you on boeing you know, david, boeing shares moving higher as the campaign reported a massive loss for the First Quarter. Why is the stock high centre it wasnt as bad as many on wall street expected. They did lose 1. 13 a share, street was expecting 1. 76 revenue better than expected Free Cash Flow, a lot of 3. 9 billion but that was not as bad as many expected all of that contributing to the shares moving up 1 right now. The commercial airplanebusines is where the focus is, specifically 737 max production. Revenue down 31 in the First Quarter as deliveries and production dropped dramatically. Deliveries, 83 in the First Quarter of this year, compared to 130 last year theyre working with the faa to come up with a new template, if you will, in terms of whats expected for Quality Control heres what dave calhoun had to say earlier today about where they are in those discussions with the faa. The review is going well. In the sense that were both approaching it business like we all want the same thing we want a factory under control. We want a set of metrics that demonstrate its under control month to month to month. Then we want compliance on the floor. Are your tools in the right place, are the instructions set up the way theyre supposed to be we want that to be as perfect as it can be. Easily measurable and i think at the end of 90 days theyll say we agree with this control plan. Well measure it and we will you will have to demonstrate performance every step of the way. Two other issues are going to get a lot of attention as boeing begins the analyst call today. First where is Steve Mollenkopf the chairman of the board when it comes to hiring a new ceo we know hes taking in a lot of information at this point. Whether or not we get some kind of indication a decision happens later in the summer or fall, remember dave calhoun committed to being here through the end of the year we know that steve is taking in a lot of information and we know that boeing is still not changing its guidance to have 10 billion in annual Free Cash Flow by the end of 2026 more than a few analysts have said, that guidance has to go away and until it goes away. Theyre not going to believe that boeing can actually hit it. We asked dave calhoun about it, he said i believe in it, thats why im keeping it there so that guidance stays there back to you. Phil, thank you for that. Visa on the move after reporting results lets getto kate rooney in San Francisco kate visa shrugging off any concerns about a slowing economy, results driven by strong Consumer Spending, stability was the message from visa yesterday the ceo calling it stable, saying we havent seen changes in Consumer Spending patterns between high spend and low spend. The company reiterating the year end guidance for the year, that was key. Thats what investors have their eyes on going into the print calling it a sigh of relief and a key positive for visa. You have payment volume up 8 , cross border volume, a gauge of International Travel up 16 . International payments up 11 or so and u. S. Volume 6 year over year highlighting the renewed cobranded agreements one question was about visa and master cards agreement to interchange fees saying Attorney Fees and other expenses from the settlement are going to be paid from existing funds in the litigation escrow account. And you have wed bush taking it to 280 and citi taking visa to 321, 15 upside from it closed yesterday. Coming off the all time highs for amex yesterday thank you. Tracking biotech and health care on the back of key earnings this morning hey, bertha. It was a mixed quarter for biogen, shares are higher with a big beat on the bottom line of cost cutting, 3. 67 per share versus 3. 45 what analysts were looking at 2. 9 billion in revenues. The surprise was a big jump in sales of the companys alzheimers drug at 19 million for the quarter compared to 10 million for all of last year with the number of patients on the drug more than doubling, according to management. Thats something to keep an eye on Boston Scientific beating on the top and bottom line and the medical device maker is boosting full year guidance, the performance driven by the companys cardiovascular unit reporting 2. 5 billion in sales, insurers have talked a lot about more demand for procedures among seniors, and humana said it saw more inpatient care in the quarter but medical costs appeared to have stabilized. And medical costs at 88. 9 of premiums was right in line with estimates though that could change because of the change health care outage delays in claims so everyone is reporting their medical costs with an asterisk this quarter humana is withdrawing the 2025 outlook given the headwinds its facing with the disappointing medicare rate increases for next year but they working very hard to price conservatively and figure out some markets they may have to exit in order to maintain margins. David . Bertha, thank you as we head to break, a road map for the rest of the hour at t shares in the red now after earlier gains this morning well dig deeper into the latest results. Plus the health of the high end consumer shares of one of the biggest luxury names takes a hit on the back of results and warning of future shales. And rubrik ready to go public tomorrow what people need to know about that ipo squawk on the street is back after this break keeping an eye on shares of at t, a similar move we saw earlier this week in verizon, the Company Reported earnings seemed to be well received initially only to turn around and thats the case there as well as you can see after what was generally a quarter on many metrics that exceeded what the analysts has been anticipating, particularly when it comes to things like postpaid phone net ads, 349 postpaid phone net adds for the company. Revenue growth of 3 you had Margin Expansion earlier i talked to, as i often do, the companys cfo early this morning, just getting into sort of where that Margin Expansion has come from. Theyve had a plan in place to cut costs over a period of time. Theyve done as much as 6 billion run rate and continue to do more, i think another 2 billion is targeted as well. None of that responding, at least at this point in terms of any enthusiasm from its Investor Base at this time. Upgrade cycle, broadly speaking, remains somewhat muted. People are holding onto their devices longer, perhaps because there hasnt been something exciting to grab ahold of when it comes to the latest iphone. Theres the leverage, given the debt load, they have reduced debt net by 6 billion in the last year and they want to get it down to 2. 5 times leverage which should take place call it first half of next year. So a decent quarter from at t. Listen to stankey as he described getting the best customers and keeping them. I dont want to play in the low calorie space. I want my share of the high calorie subscribers and thats where were focused on share of Service Revenues as a better benchmark is the company balancing growth in the right way. And when you think about how we balance our budget and what we do internally is were pretty rigorous around asking ourselves those questions. The company is also becoming a larger player in terms of fiber which is a key strategy. 8. 6 million overall, subs added another million the last year as well making it one of the bigger players when it comes to that. Maintenance there, less than copper, another reason to get Market Expansion look at verizon this week, i think it was instructive particularly consumer Side Business was weaker but the stock reversed and hasnt been able to get back near where it was previous to sort of what had been a positive early response to the numbers overall, both these companies i like to look at 20 years because theyre well owned and have been for a long time. If you want to go way back, you have to go a long way back at this point judge green, 1984 i think it was, all the baby bells. You can see, verizon shares, 15 , thats not total return how about at t i always like to do this, leslie. That was good. Some people own these things for 20 years. One is down 14 , the other is up 14 very similar. Mirror images. But you didnt want to own either one, not where the growth has been. Not outperforming the s p over that time. Nowhere near. Did they say anything about the out aage that took place in the quarter . They were asked a lot about it and i have to consult the transcript to give you the specific answer and theres no way im getting through all these papers on my desk. I put you on the spot, im sorry. But there was a focus in part on the call. It makes sense given it was so highly publicized some of us who were subscribers woke up going whats going on here. I thought it was me found out it was not. Guccis parent carrying the latest retailer to warn of a spending slow down as the stock trades down on tough results watch for gainers on the s p led higher by tesla almost back to 168 still on pace for the best 168 still on pace for the best day in about three years with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. Old school grit. New world ideas. Morgan stanley. After last months massive solar flare added a 25th hour to the day, businesses are wondering what should we do with it . Bacon and eggs 25 7. Youre darn right. Solar stocks are up 20 with the additional hour in the day. [ clocks ticking ] im ruined. With the extra hour im thinking companywide power nap. Lets put it to a vote. [ all snoring ] this is going to wreak havoc on overtime approvals. Anything can change the world of work. From hr to payroll, adp designs forwardthinking solutions to take on the next anything. Welcome back to squawk on the street. Shares on kering under pressure warning about sales ahead. Robert frank has the details good morning. Forecasting 40 to 45 decline in recurring operating income in the first half much worse than the sales warning at issue last month. That was the forecast decline of 10 to 20 for the year those shares down about 6 now for the day, revenue falling 11 in the First Quarter the big problem is gucci which typically accounts for two thirds of their operating profit sales down 21 in the quarter. Gucci brought in a new designer to turn it around but that collection wont reach stores until this year. Slow sales in china also weighing on the results. The ceo saying we had an anticipated challenging start to the year, sluggish Market Conditions notably in china and the strategic repositioning of our certain houses exacerbated downward pressure on our top line so investors getting the memo here this is a kering specific, more importantly a gucci specific problem guys robert give me your take on the high end consumer at this point. What are they are they pulling back or are they still doing just fine in terms of the willingness to spend broadly speaking luxury is slowing, looking at mid single digit growth this year, that compares to 18 to 20 last year or the year before broadly speaking its slowing. What the ceo talked about in china is polarization. So in china and the u. S. And some degree europe you have demand at the top for the high end brands and demand at the bottom, kering saying their problem is theyre in the middle and theres no middle market demand in luxury so its sector specific right now, david. But broadly its slowing. Appreciate that story regarding the consumer hilton getting a pop, seema modi is here to breakdown the comments from the ceo. Just got off the call, 1. 53 adjusted versus 1. 42 estimated. Business travel recovery remains steady, citing an improvement by large corporate, the consulting sector and government workers, seeing a surge there that is allowing the company to raise adjusted Earnings Guidance for the remaining part of this year higher rates not stopping hilton from constructing new hotels and expanding their pipeline 106 new properties in the quarter. Thats a net unit growth of 5. 6 and its a high for the broader industry as well overseas we did see revenue per available room sales up in korea and japan, though hilton did note that china growth was flat for the quarter, citing a surge in outbound travel, so more chinese traveling outside the country, a trend weve seen the last couple of months and the stronger dollar playing a role here, more people going overseas where are the new hotels being built. Did they say where they were targeting . Its across the board the u. S. Primarily but overseas the Hotel Operators remain aggressive in their expansion in countries like china, india, taiwan to them the asia growth story has not gone away and theyre continuing to grow their footprint. Makes sseen thank you. Financials in focus, Monitoring Bank of america and Goldman Sachs both holding their annual meetings this year. Stay with us, well be right back your shipping manager left to find themself. leaving you lost. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire [music] i enrolled in umgc because i became very passionate about Emergency Management. The professors were great because theyve had several Years Experience in the field. Theyve seen Emergency Management handson. Im able to learn from their experience and really make a difference. I picked university of maryland global campus because you get so much more out of it than just a diploma. Learn about our more than 125 online degrees and certificates at umgc. Edu [ music ] welcome back im Pippa Stevens with your news update. The Supreme Court is hearing the second abortion dispute this morning since overturning roe v. Wade theyre weighing when a doctor can provide abortions during medical emergencies in states with abortion bans the Biden Administration argues federal law mandates hospitals be allowed to perform the procedure in rare emergencies where a patients life or health is at serious risk. Russian Security Services detained an alley of defense minister this morning. He is accused of accepting bribes on a, quote, particularly large stage. He faces 15 years in jail if convicted. Four people were hurt after British Military horses broke free this morning in Central London Officials Say the animals escaped during Army Exercises and charged into traffic teams of First Responders were dispatched incidents including a rider thrown from one of the horses. All of the horses were contained within a few hours david. Thank you, pippa. Ahead of tomorrows critical gdp report, officials and economists are focussing on a key number that could impact the economic and inflation outlook Steve Liesman has that for us. Good morning. When that gdp number comes out wall street pours over the spending and inflation details, looking for clues. But theyll be calculating a number not part of the report. Its the underlying activity in the economy and growth is sometimes the biggest part of how it grows and its been booming. For the five years before the pandemic it was 1. 4 then dipped down 1. 3 with the First Quarter of last year it dropped down there including a massive surge at the beginning and followed by a worrying decline the past three quarters 3. 7 average the last three quarters. Its launched a debate, taking place alongside the inflation debate whether its a blip. Its going to fundamentally change everything about the economy. It would have direct implications for Monetary Policy it would put us back in an environment that would be like the late 90s where you could have faster wage Growth Without inflation. You can have faster gdp growth so, among the skeptics some of them say this is just post pandemic noise like weve seen in other data. The work from home may be misreporting the hours or mismeasuring the hours and they say its too soon to tell this data has to be looked at over a five and ten year period. The work from home is a source of greatest efficiency with better matching employees with the Jobs Companies learning to do more with less during the pandemic. On squawk box this morning, jason furman summing up the middle ground. What were seeing in the data is just noise and post pandemic gyrations. What were seeing when were reading about whats happening in a. I. , the developments in company, the developments in the technology, i think thats real. Its just not in the data yet. Cutting to the chase whats it mean for the fed . Higher productivity can mean lower for longer because its a positive supply shot, add f factories and workers without adding either. That means a higher short term rate until the positive effecteds take hold, guys. It seems clear its going to mean more demand for capital, doesnt it, steve . We talk about it all the time, just the data centers alone not to mention powering them is an enormous amount of capital. If you looked at the durable goods report, kind of on the negative side. But year over year, new orders for computers and computer products have been up strong double digits for a long time now. I dont think, david, that the stuff bought then maybe just barely showing up in the productivity data now. But i think that looking at that chart and that big bump to the right where its above double digits assuming the stuff theyre buying does any good, it could be a good sign for productivity down the road if the computers, the productivity and the a. I. Lead to a greater efficiency for the economy yes the power of technology. Thank you, steve sure. Checking in on the markets an hour into trading near session lows for the s p, dow and nasdaq as well. You can see a mixed picture across the board with the nasdaq outperformer up half a percentage point largely due to higher rates today tony tony dwyer joins us now rates and earnings playing a factor on the equity markets you had a note on the 22nd i believe that predicted the bounce weve seen the last few days do you think the downturn was technical or fundamental factors and what does that say about the upturn we are experiencing good morning. You had been up so far so fast and optimism had become extreme. Basically everybody that wanted to buy had bought and it showed up in the data we had. It was a record run of we look at a weekly just using technical stuff even though im a macro guy. It was above 90 for 19 straight weeks that doesnt happen. Its unique. So when you get that kind of run, you do for a pull back and higher rates gave us that opportunity for a pull back. It looks like last august, in a bull market, a heck of a run, overly optimistic across the board and getting a pull back based on rates. What does that tell you about what to expect in the future are you encouraged by what youve seen from earnings so far . Earnings are pretty good but again, its very interesting when you look at last year and the First Quarter of this year, if you exclude the magnificent seven from the s p operating profits. Thats 100 of the Earnings Growth you have negative earnings also, if you go into the end of this year, thats going to change where you have a much better distribution of earnings the real story for the broadening out of the market comes down to two things you have to have lower rates, thats what drove the recovery from last october 27s low, it was lower rates and hopes of a broader distribution of earnings not just concentrated on the mag seven. So those two things come into play so our game plan coming into this year was to have corrective action based on the historic run weve had. Were in the process of that once you work through that it sets up for a good ending for the year. A lot of doves are leading on indicators, nfib hiring intentions or the Employment Index or median price and existing homes, suggest disinflation in the back half. You still buy that its very interesting, any survey based thing like the hiring plan index, hit a cycle low in the most recent reading all the employment indices are bouncing along well get a reading next week. I cant find where the employment is happening when you look at the Small Business hiring plans or manufacturing. So where is the Employment Data really booming to the point that its keeping Monetary Policy high and i think thats where, as we work through the middle of the year, we do get some weakening in the Employment Data that gives the fed plenty of room after a historic run higher in rates to cut rates. Carl, just like seven rate cuts at the end of december was excessive, only one rate cut may be as well the market has gotten it wrong over the last two years about how many rate going into 2022, remember there were going to be three rate hikes meaning 75 basis points was predicted to be the high of the cycle so i think we have to continue to look for what can turn the tide in its earnings and distribution and the lower rates. The goldilocks of rates 7 too high, zero too low two to three seems like consensus right now. Thank you, tony. My pleasure. Coming up on money movers, interview with terry duffy, and the ceo of eqt, largest nat gas producer, where he thinks Energy Prices go from here. Thats the top of the hour even Space Age Technology cant prevent accidents at work. So talk to your agent about workerss comp insurance from pie, or visit pieinsurance. Com. Safety first, then pie insurance. Welcome back the nyse is gearing up for another big ipo, microsoft backed rubrik is set to debut tomorrow and investor interest appears to be higher than expected bob pisani joining us on set where the debut takes place here tomorrow how high we dont know. But its high. Data Security Firm rubrik pricing tonight seeking to raise 23 million shares, thats 28 to 31, thats a big ipo. This is an interesting test of demand for Tech Companies and high growth but are also unprofitable rubrik reported a loss of 354 million in fiscal 2024, that ended january 31st of this year but rubrik is one of Many Companies floating in the next couple of weeks tomorrow marex floating 15 million shares, 18 to 21 at the nasdaq, another 300 million. And friday Loar Holdings is floating 11 million shares 24 to 26 thats another 275 million but wait theres more. Viking holdings, you know them, theyre going to float 44 million shares at 21 to 25 do the math on this, thats a billion dollar ipo right there you put all of this together we should be raising roughly 4. 5 billion in the month of april. This is one of the biggest months for ipos in many years. The ipo business is in the midst of the biggest downturn since the financial crisis the last two years having among the worst in decades, 2022, 7 billion were rating 4. 5 in one month. Helping sentiment is the fact. Recent ipos are above their offering price, aibota, paks group, even rediddit. As you know, its all banker talk on rubrubrik. Unbinding orders. I have no idea whether five times over sub rised is add gooz as 10 or 20 times oversub skriezed i would think it would be in the high end of the range, wouldnt be surprised if it went from 32 to 33. A great sign. See you in the coming days quite often. Still to come this morning, the Senate Voting in favor of the bill that could lead to a ban of tiktok in the u. S. Well talk about that. Well talk about that. Back in two. You people are guitar noises . Hand over the air guitar. Ive got another one. Welcome back to squawk on the street. Its a busy day for the banks with bank of america and Goldman Sachs holding their annual meetings this hour the Group Overall hoping to continue its rally, aiming for its fifth straight day of gains, already the third best performing s p sector yeartodate some of the sectors largest outperformers include goldman and wells fargo, both touching new 52week highs. Another group to watch is american express, hitting new alltime highs going back to its ipo, in may 1977 so pretty remarkable a lot of that is just a factor of the overall macro picture higher for longer rates can be boon for these companies also, the prospect and the consensus idea that we are kind of in soft landing territory and goldman coming off a Strong Quarter that was an alltime high yesterday. Its back a little bit but alltime high for goldman. Revival of Capital Markets, which we were just talking about with bob pisani. All of these things have got informerses back into banks that may have been on the sidelines, because of a lot of macro factors, because of the direction of rates, which is still an uncertainty out there, the overall economy, as well as the revival in Capital Markets and weve seen some nice results from asset wealth management, as well, just given the increasing tide of the markets in the First Quarter. We mentioned the wells report card, of various bank ceos and Stock Performance under their tenure jamie and solomon, 1 and 2 1 and 2 and it matches kind of what their stocks have done so you know, hes kind of its a combination of confidence in their leadership, as well as what the banks have done in the stock market that led him to pick those as one and two. Meantime, in washington, the Senate Passing that legislation yesterday, as you know, that would force chinese owner bytedance to sell tiktok or even face a ban of the app in the United States. Our Emily Wilkins in d. C. With the latest good morning, emily. Good morning, carl. Were actually waiting right now for President Biden to sign this piece of legislation into law. The Senate Overwhelmingly passed that ban on tiktok last night. Its part of a larger package that included the 95 billion in foreign aid for ukraine, israel, and the indopacific region, plus other National Security measures so under the bill, tiktok would have nine months to find a buyer and divest from Parent Company bytedance. Biden could extend that if he wanted for up to a year, but either way, its going to prevent any ban of the popular app that 170 million americans use from happening before the november election. And thats going to be critical. Biden, of course, is looking to make sure that hes persuading the younger vote theres a lot of concerns that if tiktok disappeared before then, that could pose issues senator mark warner said the concerns around a tiktok are both that bytedance could give data on americans to the Chinese Government, and control what content users do and dont see the truth is, these Chinese Companies at the end of the day, they dont owe their obligation to their customers or their shareholders, but they owe it to the prc government now, of course, the clock is ticking for tiktok to make a sale, but they could have more time, because tiktoks ceo has the vowed the company is going to pursue legal action against the measure, is that could give the app a few more years to figure out a path forward, given that some of the courts do take a while to get everything through. And while some have raised concerns that this new law could violate free speech, snaeeveral senators i spoke to yesterday said theyre confident that this bill can withstand a legal challenge. Tl that there is a precedent for limiting foreign influence other apps that have had to be sold or divested before, this includes grinder, a Health Care App called patients like me. Lawmakers are hoping that this bill that we are still waiting right now for biden to come out and sign, if it does have a legal challenge, that it will ultimately wind up succeeding. Guys emily, looking at a bernstein note this morning, will the Chinese Government relent . Probably not will the Chinese Government reta retaliate . Probably will this heard by the Supreme Court eventually probably they say, buy meta, buy google, cover snap after earnings. What do you think the legal challenge would look like . I mean, tiktok could take this a couple of different ways. One thing that lawmakers were very concerned about is that tiktok could come and say, look, this bill targets us and only us and therefore that is illegal under the current law. Lawmakers have tried to make sure that the bill was written to be broad enough that it would not just target tiktok, although, of course, tiktok is the main bill that is that has raised so many concerns. Emily, thank you. Emily wilkins in d. C. , as we continue to await the president signing that bill. Well keep an eye on the markets here with the s p 500 down fractionally, the nasdaq up. Our live market coverage continues right after this good wednesday morning welcome to money movers. Im Carl Quintanilla with leslie picker live on the floor of the new york stock exchange. This hour, a big week of tech earnings as we dissect teslas surge today and look ahead to me to tonight plus, the ceo of the