Transcripts For CNBC Squawk 20240703

Tech bouncing back microsoft and alphabet up sharply. Plus the Biden Administration is awarding micron 6 million in federal grants to boost production of chips in the state of new york and idaho. Were going to discuss all that with microns ceo. Hes live at post nine and the oil giants, exxon and chevron, both posting lower First Quarter profits. Mike wirth will join us this hour well go over those results. Lets begin with the markets and this mornings inflation data, highly anticipated, jim, not just core pce but best couple of months on spending in about a year look, this is a front frontsybacksy day versus what we got im going to mention somebody. You tell me if you agree pangloss pangloss. Panglossian number. Were taking the s. A. T. This morning . Thats where youre starting the show today on this friday in late april you want to explain that to everybody else the bonds are right i have to tell you, carl, last night im sending a note to ruth in the middle of the night, fantastic. Alphabet, david. Shes the president alphabet gave us not only an unbelievable blowout number, but they also gave us granularity. They told us what was going on it was joy i left that time warner dinner with sara, how do you like that drop, and it was just incredible it was one of the greatest Conference Calls, and then microsoft blows alphabet away with how great it was. Does it really . Does microsoft below alphabet away really kind of you think so . I just think the increase there is just extraordinary. The increase. Well, because the use of a. I. The increase being what the overall just the amount of azure the upside surprise was remarkable both top and bottom line and amy hood, who is, like, never effusive, i thought, came in and kind of just said, all right, this is ours. Give me the ball and i thought it was a great quarter. What can i say by the way, snap, i mean, i know were small, but i think you have my man from snap. We do have evan, yes. Thats right this morning that will be good i know its not big, but we had a night last night about a. I. , david, that tells me its real well, the spending is incredible while you were at your fancy dinner, i was just home watching the knicks lose, but reading those Conference Calls, and the thing that stands out in both microsoft and alphabet was how badly the sixers played in the first half no. It was how much theyre spending how much they continue to spend. This after, of course, meta took up guidance on its capex to what could be even as high as 40 billion, though most people dont expect it will necessarily go there during the year were talking about 50 billion in microsoft, potentially. Somebody on the call asking, could you see yourself spending 100 billion and they didnt really say no. Thats a check to who its all nvidia right and who was on 60 minutes on sunday night i dont know, because its friday jensen. Jensens going to be on. Da vinci himself raimondo last weekend and jensen this weekend. Its more of a business show. Too bad they dont have anybody that can do a Good Business interview bill whitakers going to be fabulous its going to be a terrific interview. What this said is, i understand exactly why zuckerberg has to spend the money, because this is an arms race who has the best a. I. . Who has the best interaction with when you speak to a. I. . And right now, alphabet surprised me you seem a lot more interested in this than core pce. Core pce we tried. We tried to lead with the core pce, and you came up with a word, pangloss, and nobody knows what youre talking about, and we moved on. Forget the pangloss forget it. It wiped it out in the sense that we no longer have to be as concerned. I will go so far as to say that, lets say President Trump were elected, i think hed say, you know what . Fed, knock yourself out. As opposed to the New York Times story or the wall street journal story which basically said no Interest Rate moves would be made without him. This move is good enough to make it so powell is able to say, if things dont go our way, we can cut again. We can because it was not stagflation that was an amazing story. Its not stagflation thats what happened we took stagflation off the table, david so, it lasted for less than 24 hours because we got rid of the stag or the flation . More the stag than the flation. Got it. Yeah okay well, thank you for that analysis why do you hurt me, michael can we just go over, for a second, what happened here sure, what happened okay, so, we did have this is what happened this is why im going to drop the pangloss okay, thank you talk a little more voltaire youre going to do it in the original french . Were going to do erasmus, much ado about nothing. Thats actually shakespeare mixed with yes, im aware. March was a week month. Were getting that from a lot of Different Companies that say, you know, like jb hunt, march was a weak all the transports, except for union pacific, because they have precision railroading. Did you see that number by jim yeah. Your partner . Your pal we got we do have a downgrade of night and cat on the notion that the business is operating well, but looks to flatten in the near term because march was weaker. And its hard to get a grip on why march was weaker because you have so much infrastructure money coming in. So, i was surprised, but i know that there wasnt a by the way, they increased their target to 315 some of these guys were bears at 208. They were really terrible. I just think that whats happened, carl, is that we its the jb hunt, which is that you had a good january, a spike in february, and then you had a decline in freight, and it was one of the that was one of the most amazing Conference Calls ever in terms of, like, a realization that march just got weak and what people say it was, it was the 60 basis point increase really, really hurt everybody other than housing, because housing was offered the equivalent of a variable rate deal so, the move up in Interest Rates during the course really hurt it really hurt ive heard this we talked this now for a couple of weeks because weve both been getting similar data points from people, i think, in terms of deceleration through march the question is, has it continued . Yes aprils just okay. Just okay. Now, look, well hear i thought that when you retweeted Doug Mcmillon the u. S. Chief, actually, john ferner talked to abc news mcmillon did say rich galanti retired. Was the ceo of costco, and Doug Mcmillon is the ceo of walmart. They said, were going to hold the line on inflation you know thats 200 Million People that were talking about that benefit doug said this on mad money. He said, listen, i think we can hold the line. If you can check inflation, particularly at the food level, which would be costco and walmart, youre really left with and you dont have to worry about auto, because we know i met with carvana last week finally, the used cars are coming down. We know that from carmax that leaves shelter, and shelter is hard to get around because of the 10 million new people who have come to the country its also because its just the building didnt occur that we thought. It just didnt occur but if its just shelter, then the American People are going to get lower rates at some point this year. In the back half of the year, you think . Yeah, because shelter is doable its doable. I mean, you cant put things up right now, but a lot of the places a lot of places started right after covid, and theyre going to come online in the next six months. That could help shelter. Even though, david, no ones building more houses than they want, because they all build to spec no one builds just, like, hey, well put up a lot of houses and see what happens they dont do that anymore thats why toll had a good number, polulte, kh, lennar had good numbers thats been one of the features of the last few years they have discipline. Strength of the Home Builders even with a significantly enormous 550 basis point rise in rates were building half as many homes as we did when we were a country of 150 Million People. Were underbuilt, underhoused. Youre on today oh, yeah. Its a big friday here you guys look great in those nice ties. Beautiful. Wow. You should wear a tshirt it protects the shirt. A tshirt im not a tshirt guy. You always i learned that at goldman they sent me home the first day and said, wheres your tshirt you dont work here without a tshirt. Im learning too much they said, go to century 21 i said, yeah when we come back, as jim and david mentioned, microns chief, sa on the billions his company is set to receive in this chips act funding. Meantime, premarket looking pretty good, although dow remains on pace for the worst month since september of 22 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. 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. Norman, bad news. And environmentally fri never graduatedne. From med school. What . But the good news is. Xfinity mobile just got even better now, you can automatically connect to wifi speeds up to a gig on the go. Plus, buy one unlimited line and get one free for a year. I gotta get this deal. Thats like 20 a month per unlimited line. I dont want to miss that. Thats amazing doc. Mobile savings are calling. Visit xfinitymobile. Com to learn more. Doc . 6. 1 billion in chips funding paired with 125 billion from micron to build these facilities here in new york and near micron headquarters in idaho. By the way [ applause ] its been mentioned before, its the single biggest private investment ever in the history of these two states. The white house announcing preliminary agreement with micron, awarding the company up to 6. 1 billion in funding for the building of new plants, second largest chip subsidy in the nation, and we are just thrilled here at post nine to have microns ceo, Sanjay Mehrotra congratulations. This is a remarkable piece of business, because you never left the United States to begin with. Jim, great to be here on the show with you all inperson. Yesterday was definitely a historic day 18 months ago, we were in syracuse announcing our vision for manufacturing Semiconductor Memory here in the u. S. , and yesterday, the president was back there with us, and we that vision is coming to reality. With this 6. 1 billion of grants, we will be building fabs in boise, idaho, as well as syracuse, new york, with 50 billion of investment through 2030 time frame. So, this is an exciting time, bringing leading edge Memory Semiconductor manufacturing to the United States. Are you talking about doing high bandwidth memory, you know, when we go back and forth . This is the most cutting edge datacenter chip. Are you doing highbandwidth memory in syracuse and idaho once those fabs get built, they will be absolutely in production with leading edge memory highbandwidth memory absolutely uses leading edge memory, so yes, the way forward for the future will certainly be produced there before i turn it over to my colleagues, i looked up clay, which is a suburb of syracuse. Sanjay, you need tens of thousands of people. Where are you going to get them in an area that, frankly, has not historically had that many workers . Thats a big focus of ours. Syracuse area definitely had manufacturing in the past, so it has the roots of manufacturing in the region. The region has the new york state has a strong University Ecosystem as well. Junior colleges, suny, and prestigious institutions as well, and of course, micron is heavily engaged with the community there. In fact, governor hochul, we established a Community Investment framework with 250 Million Investment from micron to reach out to rural communities, to reach out to veterans, underrepresented groups, women, and bring them into the workforce, start apprenticeship programs. Micron has started a clean room at a Community College to train students there, and so we are building the workforce, not only in the northeast here but across the country. We have major initiatives, no question that bringing the talent is a major priority and of course, engaging with construction unions as well to bring the Construction Workforce thats needed for the fabs when you talk about, over the next 20plus years, spending a potential of 125 billion, sanjay, what are going to be the markers by which you actually judge whether, in fact, Additional Capital is warranted and when will you start to sort of assess whether its worth investing beyond the, obviously, large initial investment absolutely, our investments will be in line with the market demand and of course, in the preliminary memorandum of terms that we have signed with the Chips Program office, we have built in the flexibility so that we can equip our fabs, bring up production in line with the market demand. That is extremely important for us, to be staying disciplined with capex, focusing on cost, and bringing supply in line with demand so, of course, looking at the demand will always be a key measure. I want to point out that our first fab that will be brought up with the support of the chips grants in boise, idaho, is collocated with our r d fab, and that really is a great benefit to have r d and manufacturing collocated that accelerates time to market of Innovative Technologies that will go into product like highbandwidth memory, and then we take them to mega scale in new york so, theres 125 billion investment in new york and idaho will be over the course of 20 years. We are right now focused on the first fab in boise, idaho, and the first two fabs in new york with investment of about 50 billion going through 2030 time frame right 50 right. Is the workforce issue going to be more acute in idaho or new york well, micron was founded in idaho 45 years ago, and we are quite a powerhouse there, and you can see that in boise, idaho, micron established the workforce. Micron has built a leading edge Semiconductor Memory company in boise, idaho we can do that in syracuse as well early, when the grants were being framed, there was some criticism that commerce was attaching too many conditions to really what was about internal hr policies and things like that was that ever a Sticking Point well, things like hr policies, these have been dna of micron all along we have focused on really inclusive workforce, absolutely providing child care to our team members. We are very soon will be starting a Child Care Center some of these things were already in play, even before we filed for our chips application. And of course, some of these details regarding some of the terms, we continue to work on these with the Chips Program office they will automatically be in the final form with the final instrument expected to be later this summer. Sanjay, the last 36 hours, weve seen incredible amount of money going to be spent by Mark Zuckerberg at meta we see it at google, and we see it at microsoft. Now, i know its initially nvidia, but its going to be you too. Were you surprised at the gigantic amount of money that is going toward you from these hyperscalers no question that as we discussed in our Earnings Call in march that it is a. I. That is accelerating the demand for memory and memory is a key enabler. I mean, think about it a. I. Needs data. I mean, you look at large language models, then theyre going into trillions of parameters they need more and more memory they need that highbandwidth memory they need lowpower memory they need more capacity of memory if you just look at nvidia gpus, starting from a100 with 40 gigabyte of memory, the latest blackwell announced with 192 gigabyte of memory in just a matter of short period of time so, memory is a key enabler, and i just wanted to show you because you brought up highbandwidth memory, jim, this is a technical marvel here how many this is 24 gigabyte today, it is with eight die stacked into it. This is smaller than my thumbnail, thinner than my thumbnail, and we have stacked eight die into this today. Its already sampled the stack with 12 die in it. Next year, it will further give an increase, and these a. I. Accelerators are hungry for memory and you know, these die, what they do is they need, today, three times more silicon to produce the same number of bits, and you know, they give tremendous high bandwidth, so what its doing is creating a real shortage on the leading edge supply, not only highbandwidth memory is in great demand its creating a shortage on the nonhighbandwidth memory, so this is the kind of marvel that micron produces. One last question i know theyre hurrying me here. Okay, so, microsoft says pcs now stabilized, going higher how do you feel about pcs right now . Well, we mentioned in our Earnings Call in march that pcs will have a modest growth, low Single Digits, 24 over 23, in terms of unit sales of pcs whats important is a. I. Enabled pcs require more memory. They require 40 to 80 more dram content than the average pc and these a. I. Enabled pc, the neural processor units will continue to increase their adoption late this year and into 2025 intel last night said that pcs are weak, so i was thinking that its raining on this side of the street, and you got the sunny side content increase is a factor. For us, another big factor is that the supply is very tight. This is what leads to 24 as being the year of recovery you called the bottom and improving fundamentals of financial performance, and 25 being a record year for the company. You nailed it at 65 in that Conference Call. That was an amazing call theyre telling me i got to go i dont want to go, but i guess we have to thank you, sanjay. We have a great team. You got the stars good work. Thank you yeah. When we come back this morning, an exclusive with chevrons mike wirth well hear what he has to say about the companys results today along with oil and nat gas prices as the futures hanging in there on this friday after an evtf wk. Ngo anywhere. okay love it umm. First word. Tonsillitis nostril uhuh. Bill uhhuh. Hiphop limping mmhmm medical bills uhhuh pancakes cash who pays you cash when you have medical bills . Grrr no idea. [tapping] gap the gap left by Health Insurance . Who pays cash to help close that gap . Aflac oh, aflac get help with expenses Health Insurance doesnt cover at aflac. Com pictionary . take a look at the premarket here, get a sense of where we are. Nasdaq had the most recent record close on april 11, but its down the most since, about 5 dow, s p had a record close march 28 and are only down 4 were going to get a little bit back this morning as the futures are green. Dont forget, you can catch us a flome, anywhere, just listen tondolw the squawk on the street opening bell podcast. grunting at morgan stanley, old school hard work meets bold new thinking. laughter at 88 years old, we still see the world 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. You founded your Kayak Company because you love the ocean not spreadsheets. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire announcer the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. Lot of handwringing about the u. S. Economy this week are we in stagflation . Is the economy running too hot one thing the journal points out today, jim, this year, the u. S. Will account for 26. 3 of global gdp thats the highest in 20 years well, look, there is a we are in a bit of a halcyon moment, but remember, also, our trade partners are not particularly china, so its easy to sneak in. A lot of what were doing is what were going to talk about with mike wirth from chevron oil and gas infrastructure, it is a major turn for almost everybody in the southeast it would be anything from dow chemical there to what sanjays talking about, with the gigantic spend on semis so, its happening its not recognized as much, because i think a lot of people feel that the administration has not been that good at getting growth, which is why the communication of that message is kind of strange for america. Yeah, well, well get a jobs number a week from today, and if april comes in below 4, well today the record for the most consecutive months below 4 . Thats amazing. Were a growth country like weve not been, and remember, we have all immigrants, ten Million People that have come in a lot of these countries do not have net increase in population. We do. That is vital for growth so, its an exciting time for the economy, and reflected in the stock market we do need 4. 1 so that we can get a fed rate cut, but thats not going to happen yet. Although, we got some weakness i know we wanted to dig in a little bit more, david, to at least the google numbers, the dividend, the capex beat, the buyback addition, 70 billion. A new dividend. The enormous buyback, as you say, 70 billion. A lot of time spent, jim, on the call, talking about youtube, which is something you love to talk about i do. Its really granular incredibly strong numbers well get to microsoft as well and, again, at the top of the show, we didnt get through all the numbers, up 31 at azure, but google, that acceleration was a significant doesnt search, by the way, is as high as its ever been, which would certainly seem to rebut those who, at least in the near term, have said that the companys facing an existential crisis in terms of search as it moves to generative a. I. And whether they can maintain what is essentially been a monopoly in search. Well, the concerns, perhaps, fading away. They kind of have over the course of the last few weeks anyway in terms of the stock, but youtube tv, by the way, has 8 million subscribers. Absolutely. We talk, and i talk often about the loss of video subscribers amongst the socalled cable companies. Yesterday, it was our Parent Company, comcast today, its charter with a loss of 405,000 video subscribers on a smaller base, by the way, so percentagewise, larger for the quarter. But some of that is being made up by the likes of youtube tv, which, again, at 8 million subs, has become a major player in terms of distributing cable channels, essentially. So glad you brought this up theyre talking about benefitting from the combination of strong launchtime growth, innovation in the user david, where the viewer is going. Theyre going to youtube and this was the first i begged them for data on youtube, and you get the data, and you realize that, well, this is how people are going to get tv i mean, its already begun. Its well under way. Just the numbers on youtube are very significant i wanted to give people ad revenue were up 21 , direct response and Brand Network revenues were down, but again, subscriptions, platforms, devices, year over year revenues increases 18 , being driven largely by youtube subscriptions. Thats not just youtube tv beauty ads. They have fashion ads. Lifestyle. Entertainment. David, you know who they are they are like the old days, the halcyon days, i used thattwice now, sorry, of linear tv right its incredible this is where they all went. They went there. Not all of them im saying the direction. A bunch of the cordcutters have gone to that, or youtube has just replaced, youtube itself, replaced watching television they dont do fire shows. They dont do cop shows. Theyre not like nci they look at mr. Beast videos, and hes remember the cat videos yes t, the cat videos are amazing. President , former cfo, i begged him, tell us how good this is. I came away thinking, look out, david zaslav they want nba. They want yeah, i mean, you cant compete the likes of these smaller players cant compete with amazon, apple, alphabet they can buy juventus, manchester united, Crystal Palace head count was down david, this quarter, i know that i love the microsoft quarter, carl, but this quarter even told us that the other bets arent doing badly waymo. Yes waymo we have a guy named musk, okay and hes trying to do se selfdriving, something robo and then we have this here, its all the robo we need mercedes had news on that front as well. Bunch of price target increases. B of a goes to 200. The b of a note is titled, firing on all cylinders, just in terms of the sellside reaction even just simple things like doing a Mcdonalds Restaurant of the future these guys are they have been on your list of things to trim, sell. Is that no longer the case if we did not get granularity from ruth about where the money is spent, you have to sell the stock. What did she do . She gave us more granularity than ive ever seen. I will tell you, shes fabulous. Youve said that before when she was at morgan stanley. Youve been saying it for a long time. Shes the best. I like anthony too the new cfo her husband i didnt know who that was. 100 billion business potentially between cloud and youtube as well, so alphabet is trying to focus, say, hey, you know, weve got a lot more than just what is going on at pure search this is company that, frankly, very apt piece by nathanson saying, listen, maybe it was there all the time. Maybe it was there all the time. Doesnt mean that they arent going to see more competition as the world moves to more generative a. I. Solutions for search, and gemini is not going to be the wont be the answer for everybody. It wont i think a lot of people are concerned that you would that you would cannibalize search, because of a. I. , and it didnt happen no, but bing numbers were better, right . I mean, bing is a thing in a way it wasnt a year and a half ago. These guys can be frank bing is, of course, if you remember, is microsofts now its powered by a. I. Everybody wants look, yesterday, Bill Mcdermott talked servicenow talked about people going on a. I. Dave, this was an a. I. Explosion last night but no one talked about the check that you have to write to nvidia, because all these guys are coming up with their own faux little chips, you know . Look, you heard micron we were talking about the high bandwidth. It is just remarkable how much how much that nvidias behind all of these, and people should remember that, because i know a lot of people feel nvidias seen its day, its come and gone, and i dont think so blackwell, as he mentioned, next generation, allows you to do this perfect video it was interesting to listen to sanjay talk about how chip intensive the new pc cycle will be by the way, microsoft pcs, up 17 . Was a beat they do guide cloud and azure higher look for doubledigit Revenue Growth in fiscal 25 thats in line with the street, jim. B. Of a said the only a. I. Beneficiary at this point is microsoft, in a sense. Well although they didnt give a lot of detail around copilot thats not fair no, they didnt. They didnt tend to emphasize it because they had so many other gaming, everything. Now, it is interesting can we point out, we have microsoft saying great things about the pc we had micron earlier on saying the pc has bottomed. But now intel, which is the primary pc chip company, their stock is down 12 , so the question is, why did they see weakness in pcs like everyone else, as they say, when no one saw it other than intel now, there was a moment in the intel Conference Call where he said, were going back to groveian ways. Thats a reference to andy grove, who, may i just mention, missed no quarters no. Grove was a tight and to invoke grove in this Conference Call with these numbers . Heresy yeah. Heresy. Ill go back to microsoft its a better story. 50 billion in capex i still that number, potentially, is what the whose capex its not just microsoft at 50 billion or alphabet at 40plus or meta. Its even elon musks new xai effort, which is raising the the information was reported on it, 6 billion in new funds for a valuation thats over 18 billion. Hes going to be spending billions buying h100s, by the way, from nvidia he has to get the higher end. Hes got to get the 200s or blackwells for his new his new for the xai effort, which is separate from teslas purchases of the h100s for tesla to fuel its own selfdriving so, the demand, jim, just keeps coming demand is incredible. I thought meta should be up a little more, because they need to be in the arms race but you know, were going to switch to davids baliliwick. Were going to oil oil is exciting today because theres exxon and, of course, chevron. Lets check back in on shares of chevron after reporting First Quarter results, which i thought were great i think the stock doesnt know what its doing. Joining us now, in a cnbc exclusive, is chevron ceo mike wirth. Mike, always great to have you on the show. Morning, jim. Good to see you. Mike, i see many good things here permian, absolutely terrific global, great. Of course, we have to talk about the acquisition. Thats but i think that ive got two other acquisitions that i like. You did a Renewable Energy acquisition, and you did pdc, which was colorado, so im asking, rather than go to the big dog that we may have to talk to that isnt complete, how are those, and how did they help you . Jim, youre right it was a really strong First Quarter, and of course, those acquisitions, along with our base business contributed to Strong Operational performance, Strong Financial performance and Strong Shareholder returns operationally, this was the highest First Quarter production in the history of our company and the First Quarter u. S. Production was up 35 versus last year. On financial performance,ninth straight quarter with adjusted earnings greater than 5 billion and all that translates to really strong returns to shareholders this is the eighth consecutive quarter where we have returned over 5 billion in cash to shareholders so, strong contributions from our core, ongoing business, and of course, important contributions from the recent acquisitions well, in the meantime, you also im not saying that you sell yourself short, but the things youre doing environmentally, i want to mention, because youre part of what i regard as the Pragmatic Energy complex, and i just want to give you the floor for people to know that were not going to roll back the things that are involving climate change, because youre at the forefront of being pragmatic and doing the right thing. I think youre using an important word pragmatic. I used the word balanced as well were investing in things that we think can bring benefits today and things that fit with our core competencies, and so, in the most recent quarter, we sanctioned a project to increase Oil Seed Processing capabilities to help grow our biofuels business, where were the second largest biofuels producer in the United States. We also sanctioned a project in california to take an oil field where weve got solar production today to support our operations, and weve got excess solar capacity, which we will now use to generate green hydrogen, and supply that initially, at least, out to retail stations for vehicle transportation so, these are things that fit with our competency, fit with our asset base, our customers, and things we can do today that help contribute to addressing the desire for a Lower Carbon Energy system. Mike, its david. A lot of focus as well on the pending transaction to acquire hess, and i wanted to just ask a few questions around that. First of all, when do you think youre actually going to schedule a shareholder vote, or when are they going to schedule a shareholder vote, and when do you believe youll be in substantial compliance with what the regulators have asked in terms of the antitrust review . Glad youre talking about shareholders this is a transaction that is good for shareholders. Shareholders of hess, the shareholders of chevron. Its good for the industry in creating a company thats well positioned for the energy transition, and its good for the people of guyana we expect the mailing on the hess proxy to go out before the end of april and a shareholder vote to be held late in may so, thats thats upon us here and weve been working constructively with the ftc. We respect the role that they play in the oversight process on transactions and expect to, you know, certify compliance with their second request here by mid year and work our way through the process with them by midyear. So both of those things on track here in the Second Quarter the unexpected part of this has been a dispute with exxon over whether or not as part of their joint operating agreement in guyana, they have a right of preemption. Are you getting the sense that exxon would like to push this arbitration out as long as it can . Well, the arbitration process is really set by the arbitration tribunal, and so we have to respect their procedures in this so, we dont control that. At an Investor Conference last month, exxon suggested that five to six months should be sufficient we certainly believe thats a sufficient time to address whats a pretty straightforward interpretation of contractual language, and weve worked with hess, whos really party to this joint operating agreement, and i think in their disclosures, have weve indicated in our disclosures that weve suggested that Third Quarter hearing and a Fourth Quarter resolution would be appropriate, so were working with hess to move this along expediently, and we think thats in everyones interests. Yeah, darren woods was a guest earlier on squawk box, and he said, listen, were not interested in making a play. These are his words, for hess. Were not interested in a transaction on hess, but he continues to say its about protecting the value they created, and they believe they have that right of first refusal. What do you say, and is there any chance we can actually see the language that is at issue here, given it would help the market decide whos got the upper hand i think, you know, ill let exxon speak for what their intentions are were not a party to this agreement, and its a confidential agreement, and so that anything that would relate to making terms of this agreement public is something that really is the province of those that are party to the agreement, and that would be, you know, exxon, hess, and cinook i think those questions are probably best directed to them just to make it clear, if you were to lose this arbitration, youre not going to buy hess theres a Condition Precedent that needs to be satisfied, and if an arbitration judgment in the event it were to go against hesss interpretation of the contract, and we feel very confident that their interpretation is the correct one, then that condition wouldnt be satisfied, and the transaction would not close, correct. So, mike, lets talk about the price of oil i understand i think theres about a 5 war premium is the way i looked at it we have an inflation problem in the country. Where would oil be trading if we didnt have problems in the mideast, and do you think that the United States can be a swing producer to actually get the price down certainly for the last decade or so, the u. S. Has been the producer thats met most of the demand growth in the world at the margin production in the u. S. Is still growing, although not at the same rate it was earlier this last decade. Demand is growing pretty strongly, up a couple Million Barrels a day last year, probably another million and a half barrels a day this year, and so while there may be a slight risk premium in the market, we also have a market thats pretty finely balanced, inventories that are a little bit on the lower end, and i think wed see, still, pretty decent Commodity Prices in this environment, and as you know, jim, its a volatile world, and we have to be prepared for ups and downs. Were prepared for volatility. Weve got a strong Balance Sheet with net debt in the Single Digits, and were very confident in the future and any price environment, which is why we raised our tdividend 8 earlier this year and continue to have a track record 37 consecutive years of increasing our dividend dividend payout is 4 , which is almost three times what the s p 500 is, and over the last five years, weve grown it at a rate, 30 higher than the growth rate of the s p so, were confident in the future, and were prepared for volatility in commodity markets. So, lets talk about what could make things difficult. You have the permian it looks like youre finally getting enough pipe from the permian to bring that to market. It wasnt the case and then you have the president calling for a pause in lng in 2028, which would be devastating, i think you would admit, because these projects have to be decided now for 2028 so theres a lot of them that are being shelved. Do you have any pipe, and do you have enough export we do have offtake capacity out of the permian weve got export capacity. Our company is well positioned for, you know, market vagaries in terms of transportation and exports. But i think the broader point you make is, you know, its a good thing for the world that the u. S. Is an Innovative Energy powerhouse its a good thing for our allies its a good thing for our economy. And its a good thing that weve got dynamic, Strong Companies in this industry that have invested in u. S. Energy as at the same time were reducing carbon, to our earlier discussion, and we need to have a policy environment that encourages investment, because not only does our economy rely on it, but those of our allies do, and the World Economy does and so, we need policies that are predictable, are consistent, that protect the environment, but that also encourage investment and development of the resources that this country has that are vital to our security well, mike, i want to thank you for coming on and answering a lot of questions tough questions about the hess deal, because the stock has gotten killed since your this yr i hope to see you soon glad that you came on the show i thought excellent quarter and terrific dividend policy thank you. David, jim, great seeing you always take care. As we go to break, lets check bonds as well, as we head yields lower across the curve in the wake of the core pce lets take a look at at yields be equities, financials and utilities, lagging, the s p close to 5990. Dont go away. iconic brands speak for themselves. We are so excited to welcome you to our community. Today is all about you. Municipal Bonds dont usually get the Media Coverage the stock market does. In fact, most people dont find them all that exciting. But, if youre looking for the potential for consistent income thats federally taxfree. Now is an excellent time to consider Municipal Bonds from hennion walsh. If you have at least 10,000 to invest, call and talk with one of our bond specialists at 18003764376. Well send you our exclusive bond guide, free with details about how bonds can be an important part of your portfolio. Hennion walsh has specialized in fixed income and Growth Solutions for 30 years, and offers highquality Municipal Bonds from across the country. They provide the potential for regular income are federally taxfree and have historically low risk. Call today to request your free bond guide. 18003764376. Thats 18003764376. Despite the midweek scare regarding equities bunch of double digit gainers on the week for the nasdaq 100 mongodb, is that a hashicorp tesla on fire. Tesla number two, google in there, further down the list, texan, kla on semi, marvel as the chips made a stand wel ke alta break here. Almost back to 5100. Stay with us the more powerful t. We never lose focus on the life you want to build. Its time for Wealth Solutions as sophisticated as you are. Its time for corient. 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. My name is oluseyi and environmentally fri and some of myone. Favorite moments throughout my life are watching sports with my dad. Now, i work at comcast as part of the team that created our ai highlights technology, which uses ai to detect the major plays in a sports game. Giving millions of fans, like my dad and me, new ways of catching up on their favorite sport. Jim, whats on mad tonight. Access and global Doug Peterson and fico not only still around but doing fabulously. So many names we didnt get to capital one, roku, snap. Roku not so good. Look, i wanted to listen to evan tell him congratulations ive been hard on him because ive been saying hes nice nice premarket gain at least, 20 plus percent on snap. Thats coming up later this morning. Very good reach of advertising. Got to hand it to him. Good weekend. You too. M. Cramer, mad money, 6 00 p. Tonight with the dow and s p well into the green. Dont go anywhere. Y to p ut finance and h. R. On one platform. Tim, you are a rock star. Using responsible ai doesnt make you a rock star. It kinda does. You are not rock stars. clears throat okay. Most of you are not rock stars. Oooh. Data driven insights, and large language models. Oh, thats so rock roll. It is, right. He gets it. Yeah. The all new godaddy airo helps you get your Business Online in minutes with the power of ai. With a perfect name, a great logo, and a beautiful website. Just start with a domain, a few clicks, and youre in business. Make now the future at godaddy. Com airo upbeat music with the push of a button, constant contacts ai tools help you know what to say, even when you dont. Hi constant contact. Helping the small stand tall. [ no audio ] good friday morning welcome to another hour of squawk on the street. Im sara eisen with Carl Quintanilla and david faber, we are live at post nine as always from the New York Stock Exchange take a look at stocks up nicely. S p is up a percent right now, and most sectors are higher. Communication services in the lead thank you to alphabet which is leading that sector, but also some strength in match, take two, comcast, having a little bit rebound after yesterdays selloff. The nasdaq comp up 1. 3 . For the week up 4 feeling like a bumpy week, overall positive the s p for the week up 2. 6 theres weakness in energy, utilities and health care. Well talk about that. Lets get to treasuries, big reaction to the pce report, the inflation report, well talk about coming in line treasuries got bought for a change the trend higher yields they come down, still el vaetsed 2year yield here are movers were watching alphabet and microsoft helping drive the market higher their shares getting a nice pop after both of them report strong earnings were going to speak with one analyst who raised his price target on alphabet shares of intel on pace for their worst day in almost four years. The street weighing in with a slew of price target cuts on the stock following a weaker outlook. Well break them down for you later this hour. Look at snap, soaring more than 20 on the back of its earnings beat daily active users during the First Quarter rising 10 and the small and medium sized advertisers on snap chat jumping 85 . Evan spiegel joins us in the next hour on money movers to talk about the companys growth outlook. Busy morning for data umich with Rick Santelli hey, rick. Hey,carl. You know, many different metrics, these are april final reads, so two weeks ago the mid month read these reads have moved quite a bit, which is a bit unusual. So we go from our headline Michigan Sentiment for the april final from 77. 9 to 77. 2, brings it to the weakest level since february if you look at current conditions, the last look, the mid month was 79. 3 this goes down to 79. 0, weakest since last year. Expectations dropped a full point from 77 to 76. Weakest since february of last year or excuse me february of this year. Now inflation, and this also is interesting, the oneyear inflation moves from 3. 1 back up to 3. 2 3. 2 is the hottest since november last year when it was 4. 5. Finally, five to tenyear inflation is the only metric out of these five that remain the same as the midmonth read at 3 and 3 , by the way, was the highest level since november of last year but it stays at 3 yields hardly moved on that, which is a little bit surprising you want to pay particularly close attention all yield moves this week, especially on a friday, after big movement to rates to the upside. Sara, back to you. Okay. Rick, thank you very much. That little move up in Inflation Expectations for the oneyear the other data point to talk about, which we were all anticipating, the pce, thats the fed prefers inflation gauge and i guess the headline it could have been worse. It comes in pretty much in line. This number usually comes in line because we have inputs, cpi, ppi for march, and we have the gdp deflate e the price deflator for the last three months theres the core which is what the fed pays close attention to, up 0. 3 . You can see bit bar chart that, you know, it does confirm that the disinflation progress has stalled out. Thats the flip side of this good that it was not worse and it was not 0. 4 or 0. 5, but it should be coming down like we saw at the end of last year, and it hasnt and thats why the fed is pivoted away from talking up rate cuts. If you look at the progress, for instance, the line chart of the core pce, this strips out food and energy more volatile, it shows you the trend has been lower, continues to be, thats good, but the flattening on the end there, thats not exactly what fed wants to see, especially because were not back at 2 when you look at the year over year number they want to be at 2. 8 that number was a little bit worse, so thats why they need to see more evidence. We settle for 2. 8 . Just have them say its okay. Some people think yes we talked to mark zandi who is at moodys. Told us yesterday if he were king for a day we would cut rates get ahead of a recession. Put it all in perspective for us, sara we have so much data that comes at us over the course of time and the anecdotal things we share in terms of Conference Calls and things of that nature, where do things stand, you know . Services inflation is still running hot. If you break down these numbers, the bulk of the inflation is coming in Services Spending and pce versus cpi more weighted to health care than housing cpi is, you know, has a heavy weighting for owners equivalent rent 0. 1 in goods spending its happening in parts of the economy like insurance, Like Health Care, like rent, and housing, and the question is, can the fed do much about it i will say on the plus side, to put it all in perspective, a big pickup in spending in the march month. 0. 8 was more than expected, and was the highest since january of 2023 so you got that in the wage data, the personal incomes rising 0. 5 . People are getting paid and still spending the question is, excess savings are running out and the savings rate did fall and we saw it fall to 3. 2 . Theyre saving less, spending more, getting paid more in wages, but the savings are running down lets go through some of the anecdotes. Tractor supply ceo on with jim for mad money and i thought it was interesting how he characterized state of the consumer weve been facing really for the better part of nine months now, the headwind where consumers are spending more on services than they are on goods, combine that with disinflation over the last sixmonths in our categories, weve been kind of navigating through those headwinds. And then how about capital one, another place that people are watching the ceo on the call linked quarter delinquency and charge off rates trends were modestly worse than what we would expect from normal seasonality and believe this is driven by lower and later tax refund payments to consumers this year relative to what weve observed, but this is not change our view that credit is settling out modestly above prepandemic levels in 2018 and 2019 so case for normalization, but early trends were watching on delinquencies. The colegate ceo on the call they had a pretty good quarter. Decent quarter. Combined volume growth and they were able to pass on higher pricing. Raise the guidance. Raise guidance. Stock up a couple of a percent. Heres what they say about the consumer. Consumer has been quite constructive weve seen, obviously, the significant inflation move through the category over the last year. We expected that we would see a return to volume growth as inflation became more benign and pricing started to stabilize in the categories and thats principally whats happened . And one more i want to bring you because it speaks to, david, your point, why dont they just start cutting ratesp walmart u. S. Ceo john ferner spoke to abc news and i pulled out this quote, at walmart we are seeing prices that are in line with where they were 12 months ago. I havent been able to say that for a few years now. Mission accomplished they dont sell as Many Services as goods, so thats not where the inflation is, but the biggest retailer in the country is saying were back to normal. It does help psychology to some extent as well, because a lot of people feel they remember prices from a number of years ago when it comes to food, comes to the basics, and that can be helpful. It can be helpful, although, you know, the cumulative impact of inflation still weighs in places where you are seeing the biggest jumps and look, there are still plenty of components in this pce number seeing 5 year over year jump, not as many as we saw say in 2022, but that number is still elevated compared to where we were in 2018, 2019 i just want to say, next week is going to be see key. We have a fed meeting and jobs report and weve got the refunding announcement from the treasury on monday. Oh. I knew you were going to be curious about that yes. Obviously, we Pay Attention very closely now to these announcements on auctions and how much the treasury has to sell. Where they will hit in terms of maturity. The coupon sizes and overall amount as well i think the feeling is the bill demand has been super strong, the shortterm debt, and well continue to see that ramp up bank of america doesnt think well see a big change in the overall size, but markets paying closer attention than we would otherwise. Big day for mega cap tech alphabet and microsoft rallying on their earnings beat market cap crossing the 2 trillion mark for the First Time Since november of 21 and announcing its first dividend. Jefferies analyst brent phil raised his target on alphabet to 200. He was at 180. Has a buy rating on the stock and a buy on microsoft happy friday, brent. Happy friday. Are we done worrying about existential threats to search on the alphabet side . I think in the short term google put up great numbers across cloud, search, and clearly the sentiment was the worst of any tech names that we cover here and everyone continued to believe that ai wasnt even part of the story and what theyre proving is, ai is going to matter, but its going to matter down the road. Today were still super early in this journey, both for microsoft and google, its really starting to only build and thats going to be the next tenyear wave were at the beginning we think that googles making the right moves. They could be quicker and faster to make those moves and get them addressed, but we think again, based on what were seeing so far, theres no erosion of search share and advertisers continue to flock to the platform because the users are still there. Weve been talking all morning about the capex arms race and it was a healthy beat on that front at alphabet last night. Is the guidance on capex still within the realm of the reasonable you know, every quarter we bring capex up for microsoft, we brought it up, you know, over 10 billion initially at the beginning of the year and were continuing to be too low on capex. I think what were finding with ai war, right, theres effectively only a handful of companies that can compete in a major way and its a capex war every vendor from meta, microsoft, google, all our capex numbers are going way higher, even for microsoft, again, clearing over 50 billion of capex this year, that number, you know, could be 65 to 70 billion plus next year youre looking at a situation where everyone is still building the Ai Infrastructure and this is why, you know, semis and hardware continue to outperform internet and software, because of the investments that all these vendors are making when zuckerberg, you know, posted the picture of him and jensen on his instagram, everyone knew where the money is going. Thats effectively where everything is going right now. Its not going anywhere else, other than nvidia and the basically enabling infrastructure, these data centers. We ran into one individual this week that said were now worrying about power and the transmission lines to transmit all this ai excitement to the end user weve got bigger problems right now beyond Just Technology that the Tech Industry has to solve, and its pretty eye opening, some of the stories that were hearing. Yeah presid, the power issuea real one and the billions that has to go into that side of things to actually make good on all the billions going into data centers is important the numbers themselves are staggering youve been covering this industry for a number of years put them in some perspective i mean, i think you said microsoft could spend 70 billion next year on capex its almost hard to conceive of numbers that large. It really is. I think you go back to, you know, this is, again, really, really early and i think they have to build ahead of the demand theyve said this today. Theyre sold out they cant meet the demand the capacity, theyre overwhelmed. This is the same situation when you talk to oracle, when you talk to everyone in the industry, theyre at this point that demand is exceeding the supply, and so theyre having to make a guess of what is the right demand level that theyre going to see and theyre all building ahead of whats happening. Now we could run into a situation where they may over build. Now the good news for microsoft is, theyve said they can over build for azure, but maybe their security business sees an influx of demand, maybe the gaming business, and they can shift demand around to their different divisions. Microsoft is in a unique situation because they can go up and down the stack from applications to security to gaming to infrastructure, other companies that we cover cant really flex that way yeah, its going to be the numbers are really hard to believe every time we look at it, theres no way they can spend more and they keep spending more and we keep raising our numbers. Again, theyre doing it profitably which is amazing. This year margin is up 200 basis points. If thats the cost to compete, what does it mean for the competitors that are not spending 70 billion or hundreds of billions of dollars on capex . Who gets hurt . Do they ultimately end up just competing with each other . Our rule is you need an ai need, users data and money. Theres only a handful of companies on the planet that can do this. Thats amazon, google, microsoft, meta. I think the rest are going to be very difficult there will be room for ai players in verticals Like Health Care and retail that we think, again, the companies that have that data and have that user, its really hard to train, to effectively run these systems, so its going to be very, very difficult for the others to survive. So the question is, what happens to oracle . Theyre on the cut line. I think theyll benefit, but theres others that will may not. Weigh whats going to happen to ibm . Are they in that same situation im talking about in the big four and the answer is no. Right we know the one key beneficiary, i dont believe you cover nvidia but that stock up another almost 5 this morning. Absolutely. Theyre the number one from every piece of work we do, everyone is spending on nvidia and again, this is hard to have these conversations with our clients right now, as a software analyst, you know, i feel like im im on aisle 4 mopping up a spilled milk Everyone Wants to be a semi and hardware Analyst Software will have its day again. Look at the microsoft move, it really hasnt had the same move that you would think it would have and its because of the capex war and those dollars falling to the infrastructure category it will come to the Application Category later this year in 2025, but today, were not trying to fight it were saying this is clearly in the semi and hardware infrastructure, dont take that tradeoff most our clients are overweight that were seeing them continue to shoot off like a rocket. Yeah. The hardware guys have seen the opposite story in years past brent, great stuff thank you so much. Always good. Brent phil on mega cap tech. As we head to break heres our road map for the rest of the hour shares of intel plunging price target cuts on the stock this morning well break them down for you. Were keeping an eye on shares of exxon and chevron, they are both down despite some beats there. Energy is the second best performing sector this year. We will take a look at that. Alphabet first ever dividend. Well get a closer look at some ndamhe top tech divide nes in this market, as squawk on the street continues. When i was your age, we never had anything like this. What . Wifi . Wifi that works all over the house, even the basement. The basement. So i can finally throw that party. And invite shannon barnes. Dream do come true. Xfinity gives you reliable wifi with walltowall coverage on all your devices, even when everyone is online. Maybe well even get married one day. I wonder what i will be doing . Probably still living here with mom and dad. Fast reliable speeds right where you need them. Thats walltowall wifi with xfinity. 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. Lets take a look at shares of chevron and exxon theyre actually both down this morning. Both Companies Reported earnings that were essentially in line, if not actually exceeding expectations, but, obviously, not the strongest quarters that they have had overall. Interestingly, hearing both from mike wirth and darren woods, on squawk box this morning, one key area for both companies of course is guy yan na its important for exxon because theyve gotten to as much as 600,000 Oil Equivalent Barrels Per Day from their operations there, that they run, but that they have a significant partner in hess and hess, of course, is being acquired by chevron. What has happened recently, and this is somewhat unusual, the significant dispute between exxon and hess, essentially, but also chevron, over the joint operating agreement that hess and exxon have in guy yan na, and whether, in fact, it gives exxon the right of first refusal and a change of control of hess to buy the 30 roughly 30 some odd percent that hess owns of the gianna operations. Heres darren woods talking about it earlier on squawk box. Take a listen ive made it clear in the past that, you know, this is not a play for hess. Were not interested in a transaction on hess. This is around protecting the value weve created as part of that development, making sure that preemption rights we believe exist in the joa are recognized and confirmed and understanding the value theyre putting on that asset is and what options are to maximize the value to shareholders. As mike wirth, ceo of chevron, similarly, you know, what his expectations are, both on getting a shareholder vote on hess, which he said i believe would come towards the end of may, and antitrust approval and when is this arbitration now that the two sides are in, going to come to fruition . I believe we have what he said here take a listen. While there may be a slight risk premium in the market, we also have a market thats pretty fin finely balanced. Inventories are on the low end and i think we still see pretty decent Commodity Prices in this environment. As you know, jim, its a volatile world, and we have to be prepared for ups and downs. Were prepared for volatility. We have a strong Balance Sheet with net debt in the Single Digits and were confident in the future and any price environment. I guess that was, obviously, not what i was talking about that was just his overall view, sara, of the market. Is the hess situation an overhang for chevrons stock well, conceivably it has introduced a great deal of uncertainty as to whether theyre going to succeed in acquiring the company, so to the extent that there are those who believe its a valuable acquisition for them, that would be the case. Now he wirth fully believes, we havent seen the language that is actually involved here, and i dont believe we will, its confidential, but they are confident that they will prevail in arbitration, but again, so is darren woods at exxon. Its an unusual situation for two companies that have been, obviously, partnered in the past, certainly in different operations as well, and it followed after what appeared to be some period of negotiation between the two around this and ultimately will end in arbitration. Well see how long it takes. Hess reported too and they had really good numbers, which was a reminder of what this is all about. Very good point there is a belief, in fact, were the deal to break, given it was done at largely a market almost a market level, and all stock, that hes stock actually would go higher, not lower. Because theyre sitting on all this production. Because guyana is working out so well as the lead there, exxon is the lead partners. Meantime, guys, first peek above 5100 in almost two weeks intel is down on its weak outlook. Whats ahead for the company here well take a look at what the street is saying da wn rba i2. Ce target cuts toy,hewee ckn we delivered a very solid q1 we met revenue, we beat on eps, we gave an outlook for first half to second half, a much stronger second half outlook, as we saw with growth across every business forecast for the second half and somewhat like the market indicates, maybe a little bit of market weakness in the first half of the year were work through that, but were very confident in the outlook. That was intel Ceo Pat Gelsinger speaking with jon fortt about the chipmakers latest results and outlook wall street not buying into the optimism, shares plunging on pace for their worst day since july 2020 and a number of analysts cutting their price target on the stock. Kristina partsinevelos tracking it all it is quite a divergence to see all the other especially ai focused chip makers up this morning and intel getting slammed. It is a divergence, but at the same time it seems to be a continuing story for intel theyre promising us that business will get better but investors are losing faith as quarterly guidance falls flat. Bernstein, for example, said we would like to believe the bottom is in, but we have lost count of the times weve heard it and frankly there isnt really much to say beyond the obvious calling the company profoundly broken, hence their price cut to 35 from 42. Rosenblat theyre losing confidence because management appears to push out one of the chip technologies to 2025 and say sell with a price target of 17 citi they were surprised and cut their price target to 35 jpmorgan was a little more optimistic they believe that overall general purpose compute demand is bottoming and thats what management said, the bottom is in q1, and were seeing a gradual recovery but they think the next year will be, quote, the most difficult for the team. They launch two Data Center Products and two client products over three new manufacturing tech notes intel did promise their new ai chip we talked about that a few weeks ago. The gowdy 3, would bring in over 500 million in revenue in the second half of the year. Goldman sachs worries intel will keep losing market share in data centers to nvidia and amd, arm, and we talk about losing shares or losing market share, look at the stock. Its taken a nose dive since Pat Gelsinger took over as ceo, down roughly 48 since his rein in 2021 intel shares have been under performing the broader chip sector consensus is, i dont want to hate on this company, but investors want to root for intel in their turnaround plan but team to want to do it from the sideline and not risk a lot of capital doing so. Yeah. Its been painful. I mean whats it going to take then to turn this thing around in a significant way well, already the disappointing thing Gross Margins dropped. Its at 43 and we need improvement there. The average selling prices are going to increase, Gross Margins increase by 200 basis points the foundry business lost 7 billion last year. This is supposed to be how they turn around and start manufacturing chips for other companies around the globe that business posted a loss of 2. 5 billion in q1 and that loss is only going to get worse in q2 i think its a matter of really the gowdy 3, the ai chip, and improving Gross Margins within the second half. Theres so much riding on the second half of this year. Yeah. Again, there it is, down over 11 . Thank you. Kristina partsinevelos on intel. Wanted to take a look at shares of charter that company reporting earnings this follows the report from our Parent Company yesterday that was not well received by the marketplace. In particular as well, comments from comcast cfo Jason Armstrong yesterday in terms of the environment for the broadband. Broadband is the key business for comcast and charter as well, although wireless becoming a more important business and they did add what were in line essentially with whatanalysts had been expecting, some i think 480,000 mobile subscribers 75,000 broadband subscribers were lost during the quarter again kind of more or less in line with video, continues to erode. 405,000 subscribers. As an overall percentage of the number of customers they had that was larger than 389,000 at comcast and points to overall a shrinking, continuing to shrink world for the cable ecosystem. Some of that being made up by the virtual mpds youtube which has 8 million. On the cast call Chris Winfrey ceo of charter said he would not provide a detailed timeline for the timing to reaccelerate the broadband business its fluid they are dealing with this acp program that is being phased out. It was government helping people to afford broadband essentially helping them to pay their bills, and that is no longer going to be around lets call it in the next month or so so charter and comcast working through what thats going to mean you can see not as bad at least as was the case yesterday. Comcast shares, rebounding a bit as you pointed out earlier. 1. 5 . Speaking of charter and intel some of the laggards on the s p this morning take a look, although the tape fairly constructive at 5100. More on the movers you might have missed and there are a bunch today. This mornings inflation print coming in line yet again vemo ahead of the feds decision next week. Dont go away. Dude, whatre you doing . Im protecting my car. Thats too much work. Weathertech is so much easier. Lasermeasured floorliners up here, seat protector and cargoliner back there. Nice out here, side window deflectors. And mud flaps. And the bumpstep, to keep the bumper dentfree. Cool its the best protection for your vehicle, new or preowned. Great. But where do i . Order. Weathertech. Com. Sfx bubblewrap bubble popped sound. 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 this is our future, ma. Godaddy airo. Creates a logo, website, even social posts. In minutes how . A. I. impressed ay i like it who wants to come see the future . get your Business Online in minutes with godaddy airo welcome back im Pippa Stevens with your cnbc news update. Former National Enquirer publisher david pecker is back on the stand be this morning for crossexamination in Donald Trumps hush money trial yesterday he testified about his role in hush money payments to adult film actress Stormy Daniels and former playboy model karen plk dougle trump has pleaded not guilty to 34 counts of falsifying Business Records related to the payments. Egypt sent a highlevel delegation to israel today in hopes of negotiating a ceasefire agreement with hamas in gaza. Thats according to an Associated Press report. Egyptian officials also warned an Israeli Ground invasion of the southern border city of rafah could have a destabilizing effect on the region and mike pinder, the last surviving member of the moody blues has died pinders family announced the death of the keyboardist and Founding Member of the rock hall inducted band today. He was 82 years old. Back to you. Tough month for classic rock. Thank you very much, pippa. Pce, the feds preferred inflation measure coming in mostly inline. Steve liesman has been tracking that and what it might mean for the fed. Good morning. Good morning. Markets dodging a bullet this morning saved by a couple hundredths of a point where the higher than expected inflation for the First Quarter was concentrated in january more than it was in february and march and we knew january was lousy. Because it wasnt bad doesnt mean it was good the headline year over year rate, it went the wrong way up a tick progress on the core has stalled to a creep so there wasnt much change in the outlook for the fed. Bettors on the june cut look likely to lose strong down in inflation in july for it to be in the money and its not that has pushed most hopes for a cut to september and beyond. If you add in the beat on consumer spending, which has been pretty strong, put that together with sticky inflation, theres a chorus of folks who say the fed may not get the window to cut and may not need to since current rates do not seem to be weighing heavily on the consumer the fed reiterates it believes the current rate for now is sufficient for the fed to hit its 2 target. I dont expect much talk about cuts, carl or sara, or about hikes. Yeah. Maybe some Balance Sheet reduction, though, people are thinking may, may we nmight get some of that. Sure. This wall street journal report that i want to be careful on the language here, because it wasnt so solid in terms of this necessarily happening, but trump allies drawing up plans to blunt feds independence and i say that because the article said it wasnt clear whether President Trump knew of these plans of these plans and denial from some of the representatives of the campaign contemplating a president having a more direct impact on the Federal Reserve and blurring that independence, wiping out that independence, how should we think about that well, you know, sara, i read the article carefully like you did and i came up with a couple takeaways. The broad brush of it is scary, but a lot of it is speculative there was stuff that was derived from a document and stuff from what advisors around the president were saying. You know, there were some pretty crazy advisors around the president in the last presidency and they would say some pretty crazy stuff and there were some smart advisors around the president and they didnt necessarily hear the crazy stuff. There was mornings we looked up, and he was going to place 50 tariffs on mexico and i would call the saner advisors and they would say we have not heard of that the document quoted was not sort of crazy stuff, the idea of the president or the congress having more say so over emergency lending from the fed, having more say so over the feds regulatory, thats not crazy if you step back and say what about the most outlandish part of it, the president having say so over the fed, well, sara, heres a quiz for you, what chart of what currency country would i put up to show why the independence of the central bank is so important. Turkish lira, no question about it there it is. Which is interesting because theyre the one that delayed a trip to the white house. Yeah. So there you go, folks there is the dollar. Look to the left there thats a time when the turkish central banker used to come to jackson hole the whole turkish central banking operation was very well regarded in the west why . Because they did a lot of smart things, they were reasonably independent. Erdogan starts to get on his case and they start to weaken policy it becomes and the lira crashes or the dollar strengthens dramatically we have the worlds reserve currency and one of those reasons is because we have an independent central bank like we say in economics, you can have any future you want, its okay to do it, but right there is the cost on your screen. Yeah. I mean it is hard to imagine even a president who thinks an election cycle getting in with a vote on the there was even one mention reddit that the president could be a governer. Its crazy to think about. Right its important to think about the president , President Trump, and the privacy in two phases. They have inside the Trump White House a very strong group of people who were betting fed nomination vets fed nominations going through a process in a way that looked a lot like other administrations that was very organized. Towards the end of the administration, that process appeared to breakdown, and it looked like the president started freelancing a bit away from that. There were two phases that i covered. One was seemed to be very controlled, very normal, and really operating the way you would think the an administration would operate and the other was, well, shall we say, very different. Yes there were always the tweets, the pressure tweet, on powell which he seemed to shake off thank you, steve. Exactly. Steve liesman. By the way, speaking of currencies, dollar yen, you care deeply, just passed 157, which is crazy japan came out overnight and didnt hint at more rate hikes and said they would keep buying bonds and their currency continues to fall sharply, not talking turkish lira but it is getting weaker april market weakness was probably long overdue and expecting chopness and volatility to come back in the coming weeks and months. Vemo strategist brian bellsy has an s p rating of 5100, and he joins us now, which is exactly where we are now, brian. What do we expect Going Forward . Well, good morning, sara. We came out with that call the last week in february, much to the chagrin of more of our investors. In fact, many people tried to label us as an uber bull lets be clear on this, were still very, very bullish longer term we still think u. S. Stocks are in a 25 secular bull market thats been our call since 2010, however, we do believe that the market so far this year really since october the second im sorry the start of the second year of the cyclical bull market has been more about fomo and momentum and more about sentiment and we believe many of our compatriots that a do what we do left their process and discipline and tried to chase the market were sticking with our process and discipline and were very, very comfortable with the 51 minutes target year end at 250 of earnings. Earnings are tracking around 241, 242 the fed is going to be on hold longer than everybody thinks and everyone is way, way too focused on fed funds futures theyve been wrong for 18 mo months we want to buy stocks cheaper. Were not trying to be cute but were investors longer term but think we get a better entry point. Fed funds futures change and can be wrong but the 10year note yield near 4. 7 does that change the longterm value pop position if you dont think the fed is going to cut any time soon. Great question, sara. If you take a look at since 2007 we have reared an entire generation that believes you only buy stocks when the Interest Rates go down or the fed comes in and cuts rates. In fact, higher rates, these higher rates are normal and we think this is year one or two of normalization that will take three to five years as we hover between 4 and 5 on the 10year treasury the longer term 75year average on the 10year treasury is 5 , so you have doubledigit Earnings Growth and double digit low single digit it sorry, high single, low double digit performance and the stock market all very normal with respect to valuation were very normal too. This is a situation where earnings, look today, are driving the market we believe that on a near term basis, again from a price perspective, wear ahead of ourselves but earnings will be the key longer term. We want to buy stocks a little bit cheaper. Are earnings expectations moving higher, though . Another great question. You know, coming into the year, revisions were quite negative and weve been calling for this earnings revision cycle to improve. We continue to see that. Now, typically and historically were starting to see some of the historical precedent follow through some tech stocks semiconductors in particular, have from an industry perspective, have been amongst the most volatile earnings longer term and were starting to see that. We have a big number coming out on may 22nd, nvidia, thats going to be a really great one for the market to gauge that we actually trimmed our nvidia position a little bit. Were not overweight anymore and i think thats been the right call as the market has been kind of soft here, but we do believe from a sector perspective, that financials, by far, are the area that were going to see the biggest uptick in earnings, especially as 10year treasuries hover in these average levels between 4 and 5 were long tech and long financials. Got it. Brian, thank you for talking us through the strategy have a good weekend. Thank you. Brian belski. After the break, google parent alphabet announcing its first ever dividend. A closer look to find yields in ckthte sce ba in a moment 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. 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It announced its first ever Cash Dividend lets get to dom chu he has more on where to find yield. I assume the yield is not too large, dom. Its going to be like meta, half of 1 by the time its done an annualized rate of roughly 50 cents, if that were to carry through quarter per quarter, youre talking 40basispoint yield. It may open things up for other inve investors. Microsoft offers threequarter of 1 yield. M m meta0. 50 . When it comes to the s p 500, tech, Communication Services and disdiscretion names that actually could have a decent dividend pay out check out the dividend screen we ran. We looked at three sectors, positive 12month Price Performance and those stocks that pay a dividend that are in that kind of tech or tech ancillary type range check out the names that came up on our screen. The top five dividend payers are big names, like ibm with 4 dividend yield cisco systems, 3. 3 . Seagate technology at 3. 2 hewlettpackard at 3 and Texas Instruments as well. If you take a look at tech dividend payers, some are a lot heftier than the mag 7, but the mag 7 are the ones that matter, so ill send it back to you. A lot of people argue check out snap today up 24 on its report about a twomonth high on this top and bottom line beat revenue up more than 20 year on year evan spiegel will join us to eado t numbers on an interview on money movers in a few minutes. Its a pillow with a speaker in it thats right craig. A team thats highly competent. Im just here for the internets. At t its superfast. Reliable. You locked us out . arrggghh ahhhh solutionoriented. [jenna screams] and most importantly. Is the internet out . Dont worry, we have at t internet backup. The next level network. I sold a pillow youve got xfinity wifi at home. Take it on the go with Xfinity Mobile. Customers now get exclusive access to wifi speed up to a gig in millions of locations. Plus, buy one unlimited line and get one free. Thats like getting two unlimited lines for twenty dollars a month each for a year. So, ditch the other guys and switch today. Buy one line of unlimited, get one free for a year with Xfinity Mobile plus, save even more and get an eligible 5g phone on us visit xfinitymobile. Com today. Big moves in the auto space. Tesla is the second biggest gainer weektodate after musks bullish Conference Call on tuesday night. Shares are on pace to end the week up more than 16 . Going in the opposite direction, its hertz falling further b of a today says it hertz so bad today as they downgrade to sell a lot of plans to unload even more evs than previous cant get rid of them fast enough. That was a poor decision to load up on those teslas and then the aftermarket prices obviously not helping them, outgoing ceo as well, i think, is still the case. Yeah, thats been rough going for hertz. Not the same for tesla, as you point out. Sara, had a nice rebound well above a 500 billion market value yet again. And outpacing the market value of exxon, which briefly eclipsed it when tesla was down over 43 . Not long ago i mean, earnings driven market, brian bell ski just told us, you do see that in some of the movers today nvidia, super micro at the top rezmet is a this is a medical Device Company that makes the sleep apnea machines it has had this wild swing because there were worried the glp1 drugs were so effective they would also help with sleep when you lose weight there was complimentary talk about the two today and the numbers came out much better than expected. Thats been a its at the top of the s p right now. Back to nvidia. Sort of a good place to end as well, given all the capex numbers. We talked about this with phil as well. Those enormous numbers so much is going towards that company and the stock is continuing to move higher. Again, 2 2. 1 trillion market value. Should add exactly the same market cap as that of alphabet which eclipses 2 trillion market cap again on the strength of those strong numbers. Strength of strong numbers all right. That will do it for me for the weekend. I think im ready. A w about you . Lot of live market coverage continues after this unlockingh r of thinkorswim, the awardwinning trading platforms. Bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. Tailor the platforms to your unique needs with nearly endless customization. And track Market Trends with uptotheminute news and insights. Trade brilliantly with schwab. Its time to bring balance to business travel. And discover the equilibrium that works for you. At national, youre in control. Skip the counter, choose any car in the aisle. And manage your rental right from the app. So you can mix work. With leisure. Or leisure. With work. Giving you the control to find the perfect balance. Go national. Go like a pro. Good friday morning. Welcome to money movers. Im sara eisen with Carl Quintanilla live from the floor of the New York Stock Exchange today the difference a day makes. Big tech lifting the market. Alphabet at a new alltime high. The ceo of schwab Asset Management is with us next. Snap shares jumping for the first time in eight quarters after earnings evan spiegel